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Delta Air Lines (DAL)
NYSE:DAL
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Delta Air Lines (DAL) AI Stock Analysis

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DAL

Delta Air Lines

(NYSE:DAL)

Rating:80Outperform
Price Target:
$70.00
▲(21.02% Upside)
Delta Air Lines scores well due to strong financial recovery, effective cost management, and strategic investments highlighted in the earnings call. The stock's valuation is attractive, though technical indicators suggest caution due to overbought conditions. The company's resilience in facing operational challenges and its strategic focus on premium and loyalty segments further bolster its position.
Positive Factors
Analyst Rating
Analyst maintains a Buy rating on shares of Delta Air Lines and raises the price target to $66.
Financial Performance
Delta Air Lines reported solid 2Q results and re-established guidance that is 8% ahead of consensus, rekindling optimism over the structural bull case.
Revenue Streams
Delta's diverse revenue streams, including loyalty programs and premium products, are helping it withstand weakness in main cabin demand.
Negative Factors
Demand Peaks
Management believes that demand peaks are becoming less extreme and demand during shoulder periods is strengthening, creating a stable demand environment for the industry.
Pricing Challenges
Delta's exposure to higher income consumers and overall revenue diversity are enabling it to withstand the weakness in main cabin pricing.
Weather Challenges
Delta's second quarter margin surprised positively despite challenging weather conditions in June.

Delta Air Lines (DAL) vs. SPDR S&P 500 ETF (SPY)

Delta Air Lines Business Overview & Revenue Model

Company DescriptionDelta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. Its domestic network centered on core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK, and Seattle; and international network centered on hubs and market presence in Amsterdam, Mexico City, London-Heathrow, Paris-Charles de Gaulle, and Seoul-Incheon. The company sells its tickets through various distribution channels, including delta.com and the Fly Delta app, reservations, online travel agencies, traditional brick and mortar, and other agencies. It also provides aircraft maintenance and engineering support, repair, and overhaul services; and vacation packages to third-party consumers, as well as aircraft charters, and management and programs. The company operates through a fleet of approximately 1,200 aircrafts. Delta Air Lines, Inc. was founded in 1924 and is based in Atlanta, Georgia.
How the Company Makes MoneyDelta Air Lines generates revenue primarily through ticket sales for passenger travel, which includes both economy and premium class fares. Additional significant revenue streams come from cargo services, ancillary fees (such as baggage fees, seat selection fees, and in-flight purchases), and loyalty programs that encourage customer retention. The airline also benefits from partnerships with other airlines within the SkyTeam alliance and codeshare agreements, which expand its market reach and enhance customer options. Furthermore, Delta has been investing in technology and operational efficiencies to reduce costs and maximize profitability, while also leveraging its extensive route network to capture demand across various market segments.

Delta Air Lines Key Performance Indicators (KPIs)

Any
Any
Passenger Miles
Passenger Miles
Measures the total distance flown by paying passengers, indicating demand for flights and overall airline capacity utilization.
Chart InsightsDelta Air Lines' passenger miles have rebounded significantly from the pandemic lows, nearing pre-2020 levels by mid-2025. Despite operational challenges like weather disruptions and main cabin softness, the company maintains strong financial health with record revenue and robust cash flow. This resilience is bolstered by growth in premium and loyalty segments, indicating a strategic shift towards high-margin revenue streams. The focus on premium offerings and co-brand card partnerships suggests a deliberate move to enhance profitability amidst fluctuating demand in traditional segments.
Data provided by:Main Street Data

Delta Air Lines Earnings Call Summary

Earnings Call Date:Jul 10, 2025
(Q2-2025)
|
% Change Since: 14.49%|
Next Earnings Date:Oct 09, 2025
Earnings Call Sentiment Positive
Delta Air Lines, Inc.'s earnings call highlighted strong financial performance, dividend increase, and strategic investments in technology and international partnerships. Despite facing challenges such as main cabin revenue softness and operational disruptions from severe weather, the company demonstrated resilience and adaptability in a dynamic environment.
Q2-2025 Updates
Positive Updates
Record Pretax Income and Free Cash Flow
Delta reported a pretax income of $1.8 billion and generated $700 million of free cash flow during the quarter, bringing year-to-date free cash flow to $2 billion.
Increase in Dividend
Delta announced a 25% increase to its quarterly dividend, reflecting confidence in its business performance.
Strong Performance in Premium Products and Loyalty Programs
Premium revenue grew 5% over the prior year, and loyalty revenue grew 8%. The co-brand card with American Express saw consumer spend growth up double digits.
Technology and Network Investments
Delta is investing in technology with initiatives like Delta Concierge and AI-enhanced pricing solutions with Fetcher. Delta also strengthened its international network with new equity stakes in WestJet and Indigo.
Operational Reliability and Customer Satisfaction
Delta led network peers across key reliability and customer experience metrics, including on-time performance and net promoter score.
Negative Updates
Main Cabin Revenue Softness
There was a noted weakness in main cabin margins across both domestic and international markets, with softness in demand during off-peak periods.
Operational Challenges Due to Severe Weather
Severe weather impacted operations throughout the quarter, with irregular operation days more than 50% higher than last year.
Capacity Adjustments Due to Demand Environment
Delta adjusted capacity to match a lower growth demand environment, particularly focusing on reducing off-peak and main cabin capacity.
Company Guidance
During the Delta Air Lines, Inc. June Quarter 2025 Financial Results Conference Call, the company provided several key metrics and guidance for the future. Delta reported a pretax income of $1.8 billion, with earnings of $2.10 per share and an operating margin of 13.2%, consistent with their April guidance. The company generated $700 million of free cash flow during the quarter, bringing the year-to-date total to $2 billion. For the full year, Delta expects to achieve earnings per share of $5.25 to $6.25 and free cash flow between $3 to $4 billion, allowing them to pay down $3 billion of debt. The airline also announced a 25% increase in its quarterly dividend. Delta's diversified revenue streams, which constitute about 66% of its revenue, remained resilient, with premium revenue growing 5% and loyalty revenue increasing by 8%. The company is optimistic about the future, with plans to further segment its cabin products and leverage AI-enhanced pricing solutions. Despite a dynamic environment, Delta remains confident in its ability to achieve its long-term financial targets, focusing on investing in technology and maintaining its competitive advantage.

Delta Air Lines Financial Statement Overview

Summary
Delta Air Lines demonstrates strong revenue and profit growth post-pandemic, with effective cost management and improved debt metrics. However, high reliance on debt and ongoing capital expenditures pose potential risks.
Income Statement
85
Very Positive
Delta Air Lines shows strong revenue growth with a 6.6% increase from 2023 to TTM 2025, and a substantial improvement from the pandemic-impacted 2020. The company maintains solid profitability, evident in its TTM gross profit margin of 23.9% and net profit margin of 7.2%. The EBIT and EBITDA margins are robust at 9.3% and 11.5% respectively, indicating effective cost management. However, the slight decrease in EBIT margin from 2024 to TTM 2025 highlights potential cost pressures.
Balance Sheet
70
Positive
Delta's balance sheet reflects a strong recovery with a solid equity position, as indicated by a significant increase in stockholders' equity from 2021 to TTM 2025. The debt-to-equity ratio has improved to 0.91 in TTM 2025, showing effective debt management. Return on Equity (ROE) at 25.7% indicates high profitability. However, the equity ratio of 22.2% suggests a relatively high reliance on debt financing, posing potential risks in volatile economic conditions.
Cash Flow
78
Positive
The cash flow statement highlights a positive trend in free cash flow, with a substantial growth rate of 65.2% from 2024 to TTM 2025, driven by improved operating cash flows. The operating cash flow to net income ratio of 1.65 in TTM 2025 demonstrates efficient cash generation relative to earnings. Nonetheless, high capital expenditures and negative investing cash flows suggest ongoing investments in business operations.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue61.92B61.64B58.05B50.58B29.90B17.09B
Gross Profit15.57B16.56B15.52B11.16B2.13B-4.37B
EBITDA8.24B7.92B8.78B5.05B3.67B-12.35B
Net Income4.49B3.46B4.61B1.32B280.00M-12.38B
Balance Sheet
Total Assets78.39B75.37B73.64B72.28B72.47B72.00B
Cash, Cash Equivalents and Short-Term Investments3.33B3.07B3.87B6.53B11.32B14.10B
Total Debt21.28B22.77B27.28B30.61B34.68B35.55B
Total Liabilities60.95B60.08B62.54B65.71B68.57B70.46B
Stockholders Equity17.44B15.29B11.11B6.58B3.89B1.53B
Cash Flow
Free Cash Flow2.33B2.88B1.14B-2.00M16.00M-5.69B
Operating Cash Flow7.40B8.03B6.46B6.36B3.26B-3.79B
Investing Cash Flow-4.72B-3.74B-3.15B-6.92B-897.00M-9.24B
Financing Cash Flow-3.67B-4.26B-3.39B-4.54B-3.85B19.36B

Delta Air Lines Technical Analysis

Technical Analysis Sentiment
Positive
Last Price57.84
Price Trends
50DMA
53.24
Positive
100DMA
49.10
Positive
200DMA
54.64
Positive
Market Momentum
MACD
1.77
Negative
RSI
56.80
Neutral
STOCH
70.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAL, the sentiment is Positive. The current price of 57.84 is above the 20-day moving average (MA) of 55.90, above the 50-day MA of 53.24, and above the 200-day MA of 54.64, indicating a bullish trend. The MACD of 1.77 indicates Negative momentum. The RSI at 56.80 is Neutral, neither overbought nor oversold. The STOCH value of 70.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DAL.

Delta Air Lines Risk Analysis

Delta Air Lines disclosed 2 risk factors in its most recent earnings report. Delta Air Lines reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Failure of the technology we use to perform effectively could have a material adverse effect on our business. Q3, 2024

Delta Air Lines Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$33.08B10.0027.70%4.23%13.13%
81
Outperform
$33.35B15.6327.12%1.30%10.61%37.32%
80
Outperform
$39.50B8.7830.07%1.08%3.01%-0.90%
74
Outperform
$12.75B27.2047.69%4.86%7.45%-13.53%
64
Neutral
$16.59B47.504.30%2.31%1.64%284.24%
63
Neutral
$10.76B16.247.41%2.07%2.60%-16.34%
62
Neutral
$8.72B16.46-21.27%1.50%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DAL
Delta Air Lines
57.84
16.95
41.45%
PAC
Grupo Aeroportuario del Pacifico
247.45
89.57
56.73%
RYAAY
Ryanair Holdings
65.13
23.67
57.09%
LUV
Southwest Airlines
31.07
3.53
12.82%
UAL
United Airlines Holdings
97.18
53.86
124.33%
AAL
American Airlines
12.57
2.18
20.98%

Delta Air Lines Corporate Events

Executive/Board ChangesShareholder Meetings
Delta Air Lines Approves Amended Compensation Plan
Neutral
Jun 20, 2025

On June 19, 2025, Delta Air Lines held its Annual Meeting of Shareholders where key decisions were made, including the approval of an amended Performance Compensation Plan. The plan, which extends until 2035, increases the number of shares authorized for issuance. Additionally, all fourteen director nominees were elected, executive compensation was approved, and Ernst & Young LLP was ratified as the company’s independent auditors for 2025. However, a shareholder proposal for written consent was not approved.

Private Placements and Financing
Delta Air Lines Completes $2 Billion Notes Offering
Positive
Jun 10, 2025

On June 5, 2025, Delta Air Lines completed a public offering of $2 billion in unsecured notes, divided equally between 4.950% Notes due 2028 and 5.250% Notes due 2030. The proceeds from this offering are intended to repay a portion of the company’s outstanding borrowings under the Payroll Support Program loan and for general corporate purposes. This financial maneuver is expected to impact Delta’s debt structure, offering flexibility in managing its obligations and potentially improving its financial stability.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 20, 2025