Delta Air Lines: Premium Positioning, Diversified Earnings, and Cash Generation Undervalued; Buy Rated With $80 Target

In a report released today, Andrew Didora from Bank of America Securities reiterated a Buy rating on Delta Air Lines, with a price target of $80.00.

Andrew Didora has given his Buy rating due to a combination of factors tied to Delta’s structural positioning and financial profile. Following a detailed discussion with Delta’s CFO, he concludes that the company is a clear leader among airlines, supported by its emphasis on premium revenue, strong cash generation, modest leverage, and diversified income streams such as loyalty and maintenance operations. He views management’s 2026 earnings guidance as deliberately cautious given macroeconomic uncertainty, but notes that underlying demand remains healthy, particularly from higher-end travelers and in a supportive capacity environment for the first half of 2026. In his view, this conservative posture makes Delta’s 2026 EPS goal of $6.50–$7.50, and his own $7.30 estimate, more credible rather than optimistic.

Didora also highlights the growing contribution of the maintenance, repair, and overhaul segment, where a revamped strategy, a stronger backlog, and targeted contract wins are expected to drive double‑digit revenue growth and meaningfully higher margins over the next several years. He projects that at robust growth rates and improved profitability, this business could more than double its operating profit by 2028, adding a relatively stable and higher-margin income source. Furthermore, he emphasizes Delta’s ability to generate several billion dollars of free cash flow annually even in a volatile macro backdrop, which should allow the company to further reduce leverage to very low levels by 2028 while maintaining steady capital spending and ongoing fleet renewal. This capital discipline, combined with diversified revenue and solid earnings visibility, underpins his view that the current share price does not fully reflect Delta’s medium‑term earnings and balance sheet strength, justifying his Buy rating and $80 price objective.

Didora covers the Industrials sector, focusing on stocks such as Alaska Air, Allegiant Travel Company, and Southwest Airlines. According to TipRanks, Didora has an average return of 1.3% and a 54.72% success rate on recommended stocks.

In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $85.00 price target.