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On Thursday, TD Cowen demonstrated confidence in Delta Air Lines (NYSE: NYSE:DAL), increasing the stock's price target from $45.00 to $50.00, while reiterating a Buy rating. Currently trading at $44.27 with a P/E ratio of 6.38, InvestingPro analysis suggests the stock is undervalued. The revision follows the airline's first-quarter 2025 performance and its projections for the second quarter of the same year. Stifel analysts have adjusted their earnings model for Delta Air Lines, acknowledging the short-term benefits of the 90-day tariff pause on most U.S. trade partners. Despite this positive development, they anticipate a revenue deceleration continuing into the first quarter of 2026.
The firm has revised its forecast for Delta's full-year 2025 earnings per share (EPS) downward to $4.34 from the previous estimate of $5.52. This adjustment aligns with broader analyst sentiment, as InvestingPro data shows 15 analysts have recently revised their earnings estimates downward. This adjustment reflects a more conservative outlook in light of the airline's recent statements and prevailing industry conditions. TD Cowen's analysis suggests that the competitive landscape may become increasingly difficult for low-cost carriers as compared to their full-service counterparts.
Delta Air Lines' recent financial disclosures and forward-looking guidance have provided insights into the company's operational expectations amidst fluctuating market dynamics. With a solid revenue of $61.64 billion in the last twelve months and a gross profit margin of 21.53%, the airline's commentary has been a critical factor in TD Cowen's updated assessment and price target adjustment.
While the firm has lowered its EPS estimate for Delta, the maintained Buy rating indicates that the analysts still see value in the airline's stock. They believe that despite the predicted revenue slowdown, Delta Air Lines is positioned to navigate the challenging environment that may impact budget airlines more severely.
Investors and market watchers will be keeping a close eye on Delta Air Lines' performance in the upcoming quarters, as the company adapts to both the opportunities presented by the tariff suspension and the broader challenges forecasted for the airline industry. InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which includes 8 more exclusive ProTips and detailed analysis of Delta's financial health and market position.
In other recent news, Delta Air Lines reported its Q1 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.46 against the forecasted $0.44. The company achieved a record revenue of $14 billion, exceeding the anticipated $13.11 billion, marking a significant positive surprise for investors. In terms of analyst ratings, Bernstein has reiterated an Outperform rating with a $56 price target, reflecting confidence in Delta's resilience despite economic uncertainties. Meanwhile, Raymond (NSE:RYMD) James has adjusted its price target for Delta to $60, maintaining a Strong Buy rating, and Citi has lowered its price target to $62 while keeping a Buy rating, both citing revised revenue forecasts. Delta announced a strategic move to limit capacity growth in the second half of 2025 to preserve profit margins, a decision acknowledged by Raymond James. The airline also secured a 10-year maintenance agreement with UPS, signaling long-term revenue diversification. These developments come as Delta navigates a challenging economic landscape, with a focus on maintaining earnings power and cost management.
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