Street Calls of the Week
Investing.com - Raymond James raised its price target on Delta Air Lines (NYSE:DAL) to $70.00 from $68.00 on Friday, while maintaining a Strong Buy rating on the airline stock. With a market capitalization of $38.64 billion, Delta is currently trading below its InvestingPro Fair Value, suggesting potential upside opportunity.
The firm cited Delta’s positive start to the third-quarter earnings season, which included both a beat on current results and raised guidance. Delta increased its 2025 free cash flow guidance to $3.5-4.0 billion, supported by improvements in domestic main cabin performance and continued strength in premium offerings. The airline’s strong performance is reflected in its impressive $62.92 billion revenue and $8.02 billion EBITDA over the last twelve months.
Raymond James noted that the recovery in main cabin performance appears broadly based but is particularly driven by a resurgence in corporate travel, especially in coastal markets. This trend could benefit other carriers like Alaska and United, despite transatlantic headwinds for the latter.
The firm highlighted Delta’s increasing confidence in delivering top-line growth, margin expansion, and earnings improvement in 2026, consistent with the airline’s long-term financial framework.
Raymond James pointed to Delta’s structural advantages compared to legacy peers, which support a margin advantage, and when combined with attractive valuation (P/E ratio of 8.05x), stronger balance sheet, and balanced capital deployment, should drive lower earnings volatility and appeal to a broad range of investors. InvestingPro data shows the company maintains a "GREAT" overall financial health score, with 9 analysts recently revising their earnings estimates upward. Get access to Delta’s comprehensive Pro Research Report and 12+ additional ProTips by subscribing to 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, which was higher than the anticipated $1.53, representing an 11.76% positive surprise. Delta’s revenue for the quarter reached $15.2 billion, slightly above the forecasted $15.04 billion. These results reflect a robust performance, contributing to increased investor confidence. Additionally, Delta’s stock experienced a notable rise following the announcement of these results. The positive financial performance highlights the company’s ability to exceed market expectations. Investors and analysts alike are likely to keep a close watch on Delta’s future earnings announcements.
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