Update shared on16 Sep 2025
Fair value Increased 2.73%Delta Air Lines’ analyst price target was raised as Q2 earnings, forward guidance, and reinstated 2025 EPS targets outperformed expectations, supported by robust demand, premium segment growth, and competitive positioning, resulting in the target increasing from $67.81 to $69.66.
Analyst Commentary
- Bullish analysts noted Delta’s Q2 earnings beat, with EPS and forward guidance ahead of consensus, and reinstated 2025 EPS guidance indicating upside potential.
- Strong demand trends across both consumer and corporate segments, along with sustained international and premium cabin revenue growth, contributed to positive outlooks.
- Analysts highlighted Delta’s unique positioning due to its premium and international network as well as its differentiated free cash flow generation.
- Industry consolidation effects were cited, with profits accruing to leading airlines like Delta as weaker competitors struggle to regain profitability.
- Softer domestic industry capacity and stable bookings imply potential for unit revenue (RASM) improvement, especially if tariff-related inflation remains modest.
What's in the News
- Delta Air Lines agreed to pay $78.75M to settle a class action lawsuit over a 2020 fuel dump incident in Los Angeles and Orange counties, while denying wrongdoing and citing regulatory compliance (Reuters).
- Delta is implementing AI-driven pricing through a partnership with Fetcherr, aiming for 20% of domestic airfares to be set by AI by year-end 2025, amid pushback from lawmakers and consumer advocates over privacy and pricing concerns (WSJ, Fortune).
- A Delta pilot was arrested upon landing in San Francisco on charges related to child sex abuse materials, confirmed by the Department of Homeland Security (NYT).
- The U.S. government is threatening to revoke Delta's antitrust immunity with Aeromexico due to concerns over anticompetitive behavior, signaling stricter regulatory oversight (Bloomberg).
- Delta experienced significant flight cancellations at its Atlanta hub due to severe weather, with 581 flights cancelled on one Saturday and additional disruptions the following day (WSJ).
Valuation Changes
Summary of Valuation Changes for Delta Air Lines
- The Consensus Analyst Price Target has risen slightly from $67.81 to $69.66.
- The Future P/E for Delta Air Lines remained effectively unchanged, moving only marginally from 12.84x to 13.09x.
- The Net Profit Margin for Delta Air Lines remained effectively unchanged, moving only marginally from 6.79% to 6.85%.
Disclaimer
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