Delta Air Lines (DAL) Valuation After Standout Q3 Results and Upbeat 2025 Outlook

Delta Air Lines (DAL) reported results for the third quarter that came in ahead of expectations, with revenue and earnings driven by growth in premium travel and recovering corporate demand. The company’s updated outlook now calls for continued momentum through the end of the year.

See our latest analysis for Delta Air Lines.

Delta’s upbeat third quarter and strong outlook came at a time when the airline industry was catching a tailwind from rebounding corporate and premium travel. The stock jumped noticeably on earnings news, quickly reversing prior softness, and share price momentum is now building on the back of sector optimism. Over the past year, Delta’s total shareholder return hit 11.4% and has soared more than 90% across three and five years. This is an impressive record that highlights the company’s long-term growth story.

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With the stock up strongly this year and analysts projecting a further upside, the real question for investors is whether Delta shares remain undervalued or if the market has already priced in the next stage of growth.

Most Popular Narrative: 1.9% Undervalued

Delta’s latest market price sits just below what the most popular narrative considers fair value, suggesting there may be more room to run. This creates a buzz among investors who want to understand the forces driving this optimism beyond quarterly headlines.

With today's trading update on Q2, Delta has smashed all expectations. In a time of year when many others are struggling to turn a profit, reaping the bulk of their earnings over the summer and the Holidays towards the end of the year, the team from Atlanta achieved a significant 2.7 cents of gross profit per available seat mile (with total revenue per ASM at 21.4 cents and total cost per ASM at 18.7 cents). Small wonder the shares pop by over 10 percent pre market.

Read the complete narrative.

Want to discover the financial model behind this narrative? It hinges on specific forward-looking assumptions for profits, revenue trajectory, and a discount rate that could surprise you. Find out what really powers this valuation and why it might defy market consensus.

Result: Fair Value of $59.84 (UNDERVALUED)

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

However, ongoing tariff risks and thin airline margins could quickly disrupt Delta's positive narrative if external shocks occur or travel demand weakens.

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

Build Your Own Delta Air Lines Narrative

If you see the story differently or want to reach your own conclusions, take a few minutes to dig into the numbers and shape your own view. 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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