Delta Is Trading Like A Risky Airline While Operating Like A Quality Business
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Motti Sapir1.19K FollowersFollow5ShareSavePlay(9min)CommentsSummaryDelta Air Lines (DAL) remains a Buy at $68, trading at just 11x 2025 earnings, with a 15–20% return potential over 1–2 years. DAL’s premium seats, loyalty program, and disciplined cost control have transformed it into a steadier, less risky business with strong free cash flow. Net debt is down over $1 billion this year, with free cash flow guidance up to $4 billion and robust liquidity supporting continued investment and dividends. Key risks include a recession, fuel price spikes, or regulatory headwinds, but DAL’s financial strength and premium positioning provide significant downside protection.
Michael Derrer Fuchs/iStock Editorial via Getty Images Back in July, I called Delta (DAL) a Buy at $56. I liked the recovery story, the way the company was keeping costs down and how it was making more from premium seatsThis article was written byMotti Sapir1.19K FollowersFollowWith over 15 years of experience in the markets and a degree in economics, I focus on breaking down companies with clarity and discipline. My goal is to give individual investors a straightforward, honest view—what’s working, what isn’t, and where the risks and opportunities actually are. I don’t chase narratives. I follow the numbers and the business underneath.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsWhat drives Delta’s improved earnings stability and margin expansion?Premium cabins, a lucrative loyalty program, and disciplined cost control have reduced volatility, lifted margins, and made DAL’s earnings more resilient versus historical cycles.How does DAL’s current valuation compare to its growth outlook?At about 11x 2025 earnings and just over 9x 2026, the stock is still priced like Delta is riskier than it really is, with 15–25% upside if EPS hits $7.25–$8.What are the main risks to the bullish thesis on DAL?A recession, fuel price spikes, or regulatory constraints could pressure earnings; however, DAL’s strong cash flow, lower leverage, and premium mix mitigate downside relative to peers.Recommended For You