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Investing.com - UBS raised its price target on Delta Air Lines (NYSE:DAL) to $72.00 from $63.00 on Friday, while maintaining a Buy rating on the stock. The airline, currently valued at $36 billion, trades at an attractive P/E ratio of 7.4x. According to InvestingPro analysis, Delta appears fairly valued at current levels, with analyst targets ranging from $31 to $90.
The price target increase follows upbeat commentary from Delta management about potential improvement in demand during the second half of 2025. Delta pointed to improving consumer confidence and a potentially more stable macroeconomic backdrop, including trade deals, that could boost corporate confidence. The market has responded positively to these developments, with the stock posting an impressive 11.6% gain over the past week.
Delta indicated it sees potential for main cabin revenue to be flat or even up in the second half of 2025, following a 5% year-over-year decline in the second quarter of 2025. The airline also noted improvement in September bookings on its Transatlantic routes. InvestingPro subscribers can access 12 additional key insights about Delta’s financial health and growth prospects, along with comprehensive analysis in the Pro Research Report.
UBS highlighted that despite these positive indicators, Delta’s guidance at the midpoint does not assume improvement in demand. This suggests the airline is taking a conservative approach to its forecasts despite the positive signals.
The price target increase represents a 14.3% boost from UBS’s previous target of $63.00, reflecting greater confidence in Delta’s potential performance through the remainder of 2025.
In other recent news, Delta Air Lines reported strong financial results for the second quarter of 2025, surpassing analysts’ expectations with earnings per share of $2.10, compared to a forecast of $2.05. The company also achieved record quarterly revenue of $15.5 billion, slightly above the anticipated $15.42 billion. Following these results, Delta increased its dividend by 25%. Goldman Sachs responded by raising its price target for Delta to $67 from $60, citing Delta’s earnings beat and improved full-year EPS guidance as key factors. Meanwhile, Morgan Stanley (NYSE:MS) increased its price target to $90 from $88, maintaining an Overweight rating, and highlighted Delta’s expected capacity reduction in the second half of the year as a positive operational strategy. Delta’s positive outlook includes full-year EPS guidance ranging from $5.25 to $6.25, with an anticipated free cash flow of $3-4 billion. The airline is focusing on expanding premium services and strategic partnerships to drive future growth. These developments reflect Delta’s strong market position and operational efficiency in a challenging environment.
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