Bernstein analyst David Vernon has raised the price target for Delta Air Lines (DAL, Financial) from $56 to $61 while maintaining an Outperform rating on the stock. According to the firm, U.S. airlines reported strong first-quarter results despite having already tempered expectations. As bookings showed signs of stabilization at the end of the first quarter and optimism around a trade agreement helped alleviate macroeconomic concerns, the outlook for airlines has improved, though it remains challenging. The firm adjusted the price targets for select high-quality stocks to reflect anticipated benefits from reduced macroeconomic anxiety and its impact on demand.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Delta Air Lines Inc (DAL, Financial) is $57.30 with a high estimate of $88.00 and a low estimate of $36.77. The average target implies an upside of 12.38% from the current price of $50.99. More detailed estimate data can be found on the Delta Air Lines Inc (DAL) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Delta Air Lines Inc's (DAL, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Delta Air Lines Inc (DAL, Financial) in one year is $44.50, suggesting a downside of 12.73% from the current price of $50.99. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Delta Air Lines Inc (DAL) Summary page.
DAL Key Business Developments
Release Date: April 09, 2025
- Pre-Tax Earnings: $382 million or $0.46 per share, flat compared to last year.
- Revenue: $13 billion, a 3.3% increase from the previous year.
- Operating Margin: Approximately 5% for the March quarter.
- Free Cash Flow: $1.3 billion generated during the quarter.
- Return on Invested Capital: Double-digit return reported.
- Profit Sharing Payout: $1.4 billion distributed to employees.
- American Express Remuneration: Grew 13% to $2 billion.
- Cargo Revenue: Increased 17% year over year.
- International Revenue Growth: 7% increase, with specific growth in Transatlantic (5%) and Pacific (16%).
- Fuel Prices: $2.45 per gallon, slightly higher than initial expectations.
- Debt Repayment: $530 million repaid, with gross leverage at 2.6 times.
- Credit Rating Upgrade: Moody's upgraded Delta's rating, marking the third upgrade in eight months.
- June Quarter Outlook: Expected operating margin of 11% to 14% and earnings of $1.70 to $2.30 per share.
- Net Aircraft Additions: Expected to be less than 1% for the year.
- Debt Repayment Target: At least $3 billion for the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Delta Air Lines Inc (DAL, Financial) reported a record revenue for the March quarter, with a 3.3% increase compared to the previous year.
- The company achieved a pre-tax income of $382 million and delivered free cash flow of $1.3 billion.
- Delta Air Lines Inc (DAL) maintained strong operational performance, leading in on-time performance and system completion factor among network peers.
- The company celebrated a $1.4 billion profit-sharing payout to employees, recognizing their contributions to 2024's performance.
- Delta Air Lines Inc (DAL) secured a 10-year agreement with UPS for its maintenance, repair, and overhaul business, supporting long-term revenue diversification.
Negative Points
- Delta Air Lines Inc (DAL) faced a challenging macro environment, with demand softness in the domestic main cabin and both consumer and corporate travel.
- The company experienced a decline in unit revenues by 1% during the March quarter.
- There is broad economic uncertainty around global trade, leading to stalled growth and impacting domestic demand.
- Delta Air Lines Inc (DAL) is not providing an updated full-year outlook due to macroeconomic uncertainties.
- The company is reducing expected capacity growth in the second half of the year to align supply with demand, reflecting a cautious approach to market conditions.
