Should You Investigate Delta Air Lines, Inc. (NYSE:DAL) At US$49.38?

Let's talk about the popular Delta Air Lines, Inc. (NYSE:DAL). The company's shares saw a decent share price growth of 14% on the NYSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Delta Air Lines’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Delta Air Lines

Is Delta Air Lines Still Cheap?

Great news for investors – Delta Air Lines is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $73.84, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Delta Air Lines’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Delta Air Lines?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 5.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Delta Air Lines, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since DAL is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on DAL for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DAL. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

So while earnings quality is important, it's equally important to consider the risks facing Delta Air Lines at this point in time. For example - Delta Air Lines has 2 warning signs we think you should be aware of.

If you are no longer interested in Delta Air Lines, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com