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Jefferies raised its price target on Delta Air Lines (NYSE:DAL) to $56.00 from $46.00 on Monday, while maintaining a Hold rating on the stock. The firm cited stable travel demand with "pockets of greenshoots" for close-in bookings during summer holidays. According to InvestingPro data, Delta, currently trading at a P/E ratio of 8.76, appears undervalued based on its Fair Value analysis.
The research firm increased its second-quarter earnings per share estimate to $2.10 from $1.90, positioning it within Delta’s guidance range of $1.70 to $2.30. Jefferies noted that Delta will benefit from easier total revenue per available seat mile (TRASM) comparisons in the third quarter due to the CrowdStrike (NASDAQ:CRWD) outage last year. The airline has demonstrated strong profitability, with trailing twelve-month earnings per share of $5.70 and revenue of $61.94 billion.
Despite the positive adjustments, Jefferies pointed out ongoing softness in Main Cabin bookings, which represent approximately 40% of Delta’s revenue. The firm also mentioned that booking curves remain shorter due to macroeconomic conditions.
For the third quarter, Jefferies projects a TRASM decline of 2.4%, an improvement from the estimated 2.6% decline in the second quarter. This translates to an adjusted earnings per share forecast of $1.27, below the consensus estimate of $1.46, though Jefferies suggested this might be at the low end of Delta’s potential guidance.
Looking further ahead, Jefferies forecasts Delta’s earnings per share for 2025 at $5.35, reflecting its outlook on the airline’s financial trajectory amid the current demand environment. InvestingPro analysis reveals strong analyst consensus with a 1.5 rating (Strong Buy), along with several additional ProTips available to subscribers. Get access to the comprehensive Pro Research Report and more detailed insights through an InvestingPro subscription.
In other recent news, Delta Air Lines has issued a warning about the potential impact of new tariffs on imported airplanes and parts, which could disrupt its ability to purchase foreign-made planes. This disruption could affect millions of customers, as Delta noted it received 47 Airbus aircraft from Canada, Germany, and France in 2023 and 2024. On the financial front, Delta Air Lines reported first-quarter earnings per share of $0.46, surpassing both Susquehanna’s projection of $0.40 and the consensus estimate of $0.38. Following this performance, Susquehanna raised its price target for Delta to $51, maintaining a Positive rating.
UBS also upgraded Delta Air Lines from Neutral to Buy, raising the price target to $66, citing an expected recovery in corporate travel and strength in premium and international travel segments. Meanwhile, TD Cowen increased Delta’s stock price target from $45 to $50, maintaining a Buy rating, despite revising its full-year 2025 earnings per share estimate downwards to $4.34 from $5.52. This adjustment reflects a more conservative outlook due to the airline’s recent statements and industry conditions.
UBS had previously increased Delta’s price target to $46, maintaining a Neutral rating, after discussions with Delta’s management revealed a positive outlook on demand trends. The airline’s competitive strategies and loyalty program have been highlighted as key factors in its robust financial performance. These developments showcase the airline’s ability to adapt to changing market dynamics and its potential for continued growth.
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