Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Goldman Sachs raised its price target on Delta Air Lines (NYSE:DAL) to $67.00 from $60.00 while maintaining a Buy rating on the stock. According to InvestingPro data, Delta currently trades at an attractive P/E ratio of 9.96, suggesting potential value for investors.
The price target increase follows Delta’s June quarter earnings beat and the introduction of better-than-expected September quarter and full-year 2025 EPS guidance. Delta shares rose approximately 12% following the announcement, outperforming Goldman’s coverage universe which was up about 10%. With an overall Financial Health score of "GREAT" from InvestingPro, and strong analyst consensus, the company shows robust fundamentals.
Goldman Sachs identified two primary drivers for Delta’s stock outperformance: better-than-feared September quarter revenue guidance of +2% year-over-year at the midpoint (versus consensus of +1%), and the reinstated full-year 2025 EPS guidance that implies upside potential to consensus at the midpoint. The company’s trailing twelve-month revenue stands at $61.94 billion, with a healthy gross profit margin of 21.53%.Want deeper insights? InvestingPro subscribers get access to 8 additional key tips about Delta, including valuable metrics and growth indicators not covered in this article.
Delta’s revenue outlook assumes stable demand, with an expected reduction in domestic capacity starting in mid-August anticipated to improve domestic unit revenue trends in the second half of 2025. The airline also noted that bookings indicate another year of strong transatlantic off-peak fall demand.
Goldman Sachs raised its full-year 2025 EPS target for Delta to $5.30 from $4.65, incorporating an improved second-half 2025 unit revenue forecast. The new $67 price target implies approximately 18% upside potential from current levels.
In other recent news, Delta Air Lines reported impressive financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved earnings per share of $2.10, surpassing the forecast of $2.05, and recorded a quarterly revenue of $15.5 billion, slightly above the anticipated $15.42 billion. Delta’s strong performance was further highlighted by a pretax income of $1.8 billion and an operating margin of 13.2%. Additionally, Delta announced a 25% increase in its dividend, reflecting confidence in its financial health.
The airline is focusing on expanding premium services and strategic partnerships to drive future growth. Analysts have noted Delta’s robust market position, supported by diverse revenue streams and a successful loyalty program. The company’s strategic initiatives include forming new partnerships and investing in innovative technologies, such as AI in revenue management. Delta’s positive outlook includes full-year EPS guidance ranging from $5.25 to $6.25 and projected free cash flow of $3-4 billion.
Despite challenges such as non-fuel unit cost growth and modest economic growth projections for 2025, Delta maintains a strong competitive position. The company plans capacity adjustments, including domestic seat reductions, while focusing on international routes during shoulder seasons. Delta’s management remains optimistic about future business travel growth and is committed to leveraging its competitive strengths to deliver value to customers, employees, and shareholders.
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