Long-Term MRO Partnership And Cost Management Will Secure Future Success

Delta Air Lines' analyst price target has edged up from $69.66 to $70.46, as analysts cite momentum in premium product offerings, positive revenue trends, and industry-wide transformation as key factors supporting a slightly more optimistic outlook.

Analyst Commentary

Recent analyst actions reflect heightened optimism around Delta Air Lines, with several firms raising their price targets and voicing confidence in key drivers of performance and future execution. Analysts see both near-term catalysts and long-term strategic shifts supporting Delta’s continued growth, but note that certain sector-wide and company-specific risks still merit attention.

• Bullish analysts consistently highlight Delta’s premium product offerings and strong international network as primary sources of margin expansion and differentiation from peers.
• Recent upward revisions to earnings guidance have been met positively, with Q3 and FY25 projections exceeding consensus and fueling higher price targets from major Wall Street banks.
• Delta is viewed as well positioned to benefit from broader airline industry transformation, particularly as technology-driven merchandising elevates product quality and drives revenue per seat.
• Upbeat management commentary on stable demand across both corporate and consumer segments, along with robust transatlantic bookings, underpins confidence in Delta’s ability to capture continued top-line growth.

• Bearish analysts remain cautious about risks tied to U.S. domestic capacity trends, which could pressure unit revenues if supply outpaces demand.
• The path back to profitability for some industry players remains challenged, raising questions about potential competitive dynamics and pricing power in the sector.
• Inflationary pressures, notably from tariffs and operating costs, present an overhang to margin expectations, even as recent macro data has been benign.

What's in the News

• Delta is replacing power units on over 300 Airbus aircraft to address toxic fume incidents and mitigate health risks for passengers and crew (Wall Street Journal).
• The company has agreed to pay $78.75 million to settle a class action lawsuit related to a 2020 fuel dump incident over Los Angeles and Orange counties. Delta denies any wrongdoing (Reuters).
• Delta has faced criticism from lawmakers and consumer groups for using artificial intelligence to set airfares. The company plans for 20% of fares to be AI-determined by year-end (Wall Street Journal, Fortune).
• A Delta pilot was arrested at San Francisco International Airport on charges involving child sex abuse materials (New York Times).
• The U.S. government has threatened to revoke Delta and Aeromexico's antitrust immunity, citing concerns over anticompetitive practices and demanding greater regulatory oversight (Bloomberg).

Valuation Changes

• Consensus Analyst Price Target has risen slightly, moving from $69.66 to $70.46.
• Discount Rate has increased modestly, up from 9.48% to 9.65%.
• Revenue Growth projections have edged up, from 3.40% to 3.58%.
• Net Profit Margin estimates have improved marginally, rising from 6.85% to 6.92%.
• Future P/E ratio remains largely unchanged, slipping fractionally from 13.09x to 13.08x.