Street Calls of the Week
Investing.com - Bernstein analyst David Vernon raised the price target on Delta Air Lines (NYSE:DAL) to $74.00 from $71.00 on Friday, while maintaining an Outperform rating on the stock. The airline, currently trading at an attractive P/E ratio of 8.05 with a market capitalization of $38.64 billion, is showing signs of undervaluation according to InvestingPro Fair Value metrics.
The price target increase follows Delta’s third-quarter earnings beat, with adjusted diluted earnings per share of $1.71, exceeding Bernstein’s and Wall Street’s expectations by 10%. The airline reported record third-quarter adjusted revenue at the high end of its recently updated guidance, contributing to its impressive last twelve months revenue of $62.92 billion and EBITDA of $8.02 billion.
Bernstein noted that Delta’s domestic business is experiencing a real inflection point that is helping the airline convert its premium revenue into bottom-line results. The firm indicated this domestic strength points to potential upside in 2026.
Delta’s fourth-quarter guidance also impressed analysts, coming in 1% above consensus estimates for adjusted revenue and 4% ahead of Wall Street expectations for quarterly earnings per share.
The airline maintained flat unit costs despite what Bernstein described as a "difficult environment," contributing to what the research firm called "a very solid quarter" overall. With a strong analyst consensus rating of 1.36 and nine analysts recently revising earnings estimates upward, Delta’s outlook appears promising. For deeper insights and additional ProTips, check out Delta’s comprehensive research report on InvestingPro.
In other recent news, Delta Air Lines reported strong financial results for the third quarter of 2025, surpassing both earnings and revenue expectations. The company achieved earnings per share of $1.71, exceeding the anticipated $1.53, representing an 11.76% surprise. Revenue for the quarter reached $15.2 billion, slightly above the forecasted $15.04 billion. These results demonstrate a positive trajectory for Delta, which also raised its 2025 free cash flow guidance to $3.5-4.0 billion. This increase is attributed to improvements in domestic main cabin performance and the continued strength of premium offerings. Additionally, Raymond James adjusted its price target for Delta Air Lines to $70, up from $68, while maintaining a Strong Buy rating. The firm’s optimism is based on Delta’s positive start to the third-quarter earnings season. These developments suggest a robust outlook for Delta, as reflected by the raised price target and strong quarterly performance.
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