Delta Air Lines (DAL) AI Stock Analysis

• Market Cap: $26.69B
• Dividend Yield: 1.39%
• Average Volume (3M): 15.93M
• Price to Earnings (P/E): 7.2
• Beta (1Y): 1.32
• Revenue Growth: 4.91%
• EPS Growth: -27.21%
• Country: US
• Employees: 100,000
• Sector: Industrials
• Sector Strength: 65
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.46
• Shares Outstanding: 652,955,140
• 10 Day Avg. Volume: 20,277,583
• 30 Day Avg. Volume: 15,933,218
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.49
• Price to Cash Flow (P/CF): 4.00
• P/FCF Ratio: 4.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $60.00
• Price Target Upside: 48.74% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

Delta Air Lines is navigating a challenging environment with strong financial performance and efficient cash flow management. While valuation metrics are attractive, technical indicators suggest caution due to bearish momentum. Earnings call insights reveal macroeconomic challenges, and revised guidance highlights demand softness. Overall, Delta remains a strong player in its industry, but external economic factors pose risks.

Positive Factors

Customer Satisfaction

Delta consistently ranks ahead of its domestic network peers in customer satisfaction/engagement surveys by focusing on offering differentiated products and delivering best-in-class service.

Financial Stability

Delta's strong balance sheet, with gross leverage at 2.6x and over $30bn in unencumbered assets, provides financial stability.

Market Perception

Airline stocks overall (with DAL part of the leading group) should be close to the top of most investors' buy lists, if/when the market goes risk on again.

Negative Factors

Macroeconomic Concerns

Macroeconomic weakness could curb discretionary spending on travel, with rising unemployment and higher cost of living leading to households cutting back on travel spending.

Profit Margins

Margins are forecasted to bottom in 2025, with no anticipated improvement over 2024 results until 2027.

Revenue Challenges

Revenue deceleration is expected through 1Q26, indicating a challenging environment for Delta Air Lines.

Delta Air Lines Business Overview & Revenue Model

Company Description

Delta Air Lines, Inc. is a major American airline headquartered in Atlanta, Georgia. It is one of the world's largest airlines, operating extensive domestic and international network services across various regions including North America, South America, Europe, Asia, and Africa. Delta offers passenger services through its mainline operations and regional affiliates, providing a range of travel options from economy to premium classes. In addition to passenger services, Delta also operates cargo services and offers maintenance, repair, and overhaul (MRO) services to other airlines.

How the Company Makes Money

Delta Air Lines generates revenue primarily through the sale of passenger tickets, which is the largest component of its income. The company offers various fare classes and services, catering to different customer needs and preferences. Another significant revenue stream comes from cargo operations, where Delta transports goods globally. Additionally, the airline earns money through ancillary services such as baggage fees, seat upgrades, and in-flight purchases. Delta also benefits from partnerships and alliances with other airlines, including code-sharing agreements, which enhance its route network and customer reach. Furthermore, Delta's MRO services provide additional income through maintenance contracts with other airlines.

Delta Air Lines Financial Statement Overview

Summary

Delta Air Lines has shown strong financial recovery with solid profitability and revenue growth. The income statement reflects stability and a positive trajectory. The balance sheet indicates moderate leverage, with a need to manage debt levels cautiously. Cash flow generation is strong, supporting operational and strategic flexibility.

Income Statement

Delta Air Lines has demonstrated strong recovery and growth in its financial performance. The TTM Gross Profit Margin stands at 22.41%, and the Net Profit Margin at 5.89%, both indicating good profitability. Revenue growth is robust, with a 6.19% increase from the previous year, signaling a positive trajectory. The EBIT Margin is 9.73%, and the EBITDA Margin is 11.90%, reflecting efficient operational management. Overall, the income statement metrics highlight stability and a solid recovery from past economic challenges.

Balance Sheet

The balance sheet shows a moderate level of risk due to a Debt-to-Equity Ratio of 1.11, indicating a balanced capital structure. The Return on Equity (ROE) is 23.76%, which is strong, suggesting effective use of equity investments. However, the Equity Ratio stands at 20.28%, which is relatively low, implying high reliance on debt financing. While the company has improved its equity position over recent years, the debt level remains a risk factor to be monitored.

Cash Flow

Cash flow analysis indicates a healthy position with a Free Cash Flow Growth Rate of 152.89% from the previous year, showcasing significant improvement. The Operating Cash Flow to Net Income Ratio is 2.21, and the Free Cash Flow to Net Income Ratio is 0.80, both indicating strong cash generation relative to earnings. These metrics highlight Delta's ability to generate cash, critical for sustaining operations and managing debt.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
61.64B	58.05B	50.58B	29.90B	17.09B
	Gross Profit
14.84B	14.13B	7.82B	-179.00M	-6.45B
	EBIT
6.00B	5.52B	1.61B	260.00M	-12.47B
	EBITDA
8.21B	8.78B	5.05B	3.67B	-12.35B
	Net Income Common Stockholders
3.46B	4.61B	1.32B	280.00M	-12.38B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.07B	3.87B	6.53B	11.32B	14.10B
	Total Assets
75.37B	73.64B	72.28B	72.47B	72.05B
	Total Debt
22.77B	27.28B	30.61B	34.62B	35.55B
	Net Debt
19.70B	24.54B	27.34B	26.68B	27.24B
	Total Liabilities
60.08B	62.54B	65.82B	68.84B	70.70B
	Stockholders Equity
15.29B	11.11B	6.46B	3.63B	1.35B
Cash Flow		Free Cash Flow
2.88B	1.14B	-2.00M	16.00M	-5.69B
	Operating Cash Flow
8.03B	6.46B	6.36B	3.26B	-3.79B
	Investing Cash Flow
-3.74B	-3.15B	-6.92B	-897.00M	-9.24B
	Financing Cash Flow
-4.26B	-3.39B	-4.54B	-3.85B	19.36B

Delta Air Lines Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 40.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAL, the sentiment is Negative. The current price of 40.34 is below the 20-day moving average (MA) of 41.61, below the 50-day MA of 50.19, and below the 200-day MA of 52.76, indicating a bearish trend. The MACD of -2.72 indicates Negative momentum. The RSI at 41.86 is Neutral, neither overbought nor oversold. The STOCH value of 48.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DAL.

Delta Air Lines Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DAL	74 Outperform	$26.69B	7.25	27.52%	1.39%	4.91%	-27.21%
RYAAY	74 Outperform	$22.80B	13.45	21.21%	1.88%	5.39%	-15.92%
UAL	74 Outperform	$21.53B	6.97	33.57%	―	5.31%	35.95%
PAC	70 Outperform	$9.81B	20.68	42.32%	3.65%	-2.03%	-11.39%
Sector *	62 Neutral	$4.16B	11.31	5.46%	215.65%	4.12%	-8.47%
LUV	61 Neutral	$13.80B	31.87	4.50%	3.00%	5.34%	-6.20%
AAL	56 Neutral	$6.22B	8.54	-21.27%	―	2.70%	2.20%

Delta Air Lines Corporate Events

Delta Air Lines Lowers Revenue Forecast for Q1 2025

Delta Air Lines has revised its financial outlook for the March 2025 quarter, anticipating a total revenue growth of 3 to 4 percent year-over-year, down from the initial guidance of 7 to 9 percent. This adjustment reflects a decline in consumer and corporate confidence due to macroeconomic uncertainties, impacting domestic demand. Despite these challenges, Delta’s premium, international, and loyalty revenue growth remains resilient, showcasing the company’s diversified revenue streams.