Analyst Tabitha Foo of DBS maintained a Hold rating on Delta Air Lines (DAL – Research Report), retaining the price target of $45.00.
Tabitha Foo has given her Hold rating due to a combination of factors impacting Delta Air Lines. Despite Delta’s strong brand reputation and its ability to maintain a premium market position, there are concerns about the company’s near-term financial performance. The management’s decision to withhold full-year earnings guidance, coupled with a reduction in operating margin and EPS guidance for the first quarter of 2025, reflects uncertainty in both corporate and consumer sentiment.
While Delta’s premium and international segments have shown resilience, the overall demand outlook remains clouded by macroeconomic uncertainties and weaker sentiment. The potential for further earnings downgrades exists, particularly if domestic travel demand continues to soften. Additionally, persistent cost pressures, such as volatility in fuel prices and wage growth, could further impact earnings. Despite these challenges, Delta’s medium-term growth prospects are supported by its product premiumization strategy and strong cash flows, which are expected to enable share buybacks and dividends.
In another report released on April 7, UBS also downgraded the stock to a Hold with a $42.00 price target.
DAL’s price has also changed moderately for the past six months – from $51.330 to $40.880, which is a -20.36% drop .