Delta Air Lines (DAL) stock is down 13% after the carrier cut its first-quarter 2025 revenue and profit forecasts, citing weak consumer and corporate travel demand in the U.S.
In a written statement, Delta said that it expects revenue in the quarter ending March 31 to rise no more than 5% from last year, down from a previous forecast issued in January of this year that called for 6% to 8% growth.
Delta also slashed its first-quarter earnings forecast to $0.30 to $0.50 per share from previous guidance that called for earnings per share (EPS) of $0.70 to $1. The lowered outlook comes a day before a JPMorgan Chase (JPM) airline conference where CEOs of the biggest U.S. carriers are expected to update investors on demand trends.
Recession Fears
In its written statement, Delta said: “The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in domestic demand.” The news from Delta feeds into rising fears that the U.S. economy is slowing and might be headed for a recession.
The reduced outlook is a sharp reversal from Delta’s bullish forward guidance issued in January of this year. The company delivered strong financial results for the final quarter of 2024 and offered an upbeat outlook for the current quarter and year ahead. But demand appears to have quickly soured for the Atlanta, Georgia-based carrier.
DAL stock is down 17% on the year.
Is DAL Stock a Buy?
Delta Air Lines stock has a consensus Strong Buy rating among 15 Wall Street analysts. That rating is based on 15 Buy recommendations assigned in the past three months. The average DAL price target of $82.60 implies 64.12% upside from current levels.
