Update shared on01 Sep 2025
Fair value Increased 2.95%Delta Air Lines’ Analyst Price Target has been raised to $67.66, primarily reflecting strong Q2 earnings, reinstated and above-consensus guidance, robust demand—especially for international and premium products—and continued pricing power supported by industry capacity discipline.
Analyst Commentary
- Stronger-than-expected Q2 earnings, with Q3 and FY25 EPS guidance reinstated and surpassing consensus estimates.
- Continued stable demand across both consumer and corporate travel segments, with international and premium products driving revenue growth.
- Positive outlook for transatlantic and off-peak travel demand, supported by robust booking trends into the fall.
- Industry capacity reductions supporting unit revenues, with potential for further RASM (revenue per available seat mile) upside if inflation remains controlled.
- Differentiation through Delta’s premium offerings, extensive international network, and strong free cash flow profile.
What's in the News
- Delta Air Lines agreed to pay $78.75 million to settle a class action lawsuit over a 2020 fuel dump in Los Angeles and Orange counties, while denying wrongdoing and stating compliance with federal procedures (Reuters).
- Delta is implementing AI-driven dynamic airfare pricing, aiming for 20% of domestic fares to be individually determined by year-end 2025, up from about 3% currently, with ongoing scrutiny from lawmakers and consumer advocates regarding data use and pricing fairness (The Wall Street Journal, Fortune).
- A Delta Air Lines pilot was arrested at San Francisco International Airport on charges related to child sex abuse materials, with confirmation from the Department of Homeland Security (The New York Times).
- The U.S. government is threatening to revoke Delta's antitrust immunity with Grupo Aeromexico as part of efforts to address perceived anticompetitive behavior in Mexican aviation, requiring new schedule filings and charter approvals (Bloomberg).
- Severe weather at Delta’s Atlanta hub caused the cancellation of over 630 flights across a weekend, prompting operational recovery efforts (The Wall Street Journal).
Valuation Changes
Summary of Valuation Changes for Delta Air Lines
- The Consensus Analyst Price Target has risen slightly from $65.87 to $67.66.
- The Consensus Revenue Growth forecasts for Delta Air Lines has risen slightly from 3.3% per annum to 3.4% per annum.
- The Future P/E for Delta Air Lines has risen slightly from 12.53x to 12.86x.
Disclaimer
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