Delta Air Lines (DAL): Exploring Valuation Following Fresh Analyst Upgrades and Strong Earnings Outlook

Delta Air Lines (DAL) is enjoying an uptick in analyst sentiment after both Jefferies and Zacks issued upgrades, highlighting strong revenue momentum, growing margins, and steady advance bookings as key positives for the stock.

See our latest analysis for Delta Air Lines.

Delta’s run of upgraded analyst outlooks comes after some notable operational wins, including record quarterly results and new international routes announced just weeks ago. This has happened even as markets have experienced economic jitters and sector-wide volatility. Over the past year, Delta’s total shareholder return is up a solid 21.7%, reflecting strong momentum and growing investor confidence in its blend of reliable earnings and value pricing for both the short and long term.

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The question now is whether Delta’s shares, still trading at a significant discount to analyst targets despite a strong run, remain undervalued or if the market is already factoring in the next leg of growth. Is there still a buying opportunity here?

Most Popular Narrative: 4.6% Undervalued

Delta Air Lines' fair value, according to the most followed narrative, lands just above the recent closing price. This has raised debate about how much upside may remain. The calculation is based on a mix of margin resilience and caution after the company signaled softer demand, a tension noticed by retail investors who are following closely.

True, the carrier had to jettison its record guidance for 2025 it had issued in January. Still, Delta made a gross profit of roughly 1 cent per available seat mile in the traditionally weak winter quarter when other airlines struggle to turn any profit at all (my calculations from an adj. total revenue per seat mile (TRASM) of 18.97 cents and adj. cost per available seat mile (CASM incl. fuel) of 17.96 cents). Thus, the carrier made an almost exact landing at where I had estimated its margins a couple of weeks ago.

Read the complete narrative.

What wildcards shape this valuation? Behind the scenes, the narrative hinges on sharp cost controls and a controversial profit outlook revision. The curious part is how one simple adjustment in forward estimates can affect the fair value target. Want to uncover which forecasts drive this number? The full story breaks it down.

Result: Fair Value of $59.84 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, major shocks such as trade tensions or unexpected economic downturns could quickly disrupt Delta's momentum and challenge the undervalued thesis.

Find out about the key risks to this Delta Air Lines narrative.

Build Your Own Delta Air Lines Narrative

Curious to see things from another angle, or want to shape your own story? It takes less than three minutes to customize your view, so dive in and Do it your way

A great starting point for your Delta Air Lines research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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