Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Morgan Stanley (NYSE:MS) has raised its price target on Delta Air Lines (NYSE:DAL) to $90.00 from $88.00 while maintaining an Overweight rating on the stock. The airline, currently valued at $37 billion, trades at an attractive P/E ratio of 9.96x and has earned $5.70 per share over the last twelve months.
The price target increase follows what Morgan Stanley described as a positive call and guidance from Delta that gave investors a "bright green light" to invest in the airline sector.
Morgan Stanley noted that investors responded favorably to Delta’s outlook, with market participants increasing their positions in airline stocks following the company’s commentary.
The firm highlighted that Delta is expected to reduce capacity in the second half of the year, which could improve the carrier’s operational efficiency and financial performance.
Morgan Stanley also pointed to signs of positive consumer behavior inflection, suggesting that the second half of 2025 might align more closely with the firm’s earlier expectations for the year.
In other recent news, Delta Air Lines reported impressive financial results for the second quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $2.10, compared to the forecast of $2.05. The company achieved record quarterly revenue of $15.5 billion, slightly above the anticipated $15.42 billion. Following these results, Goldman Sachs raised its price target for Delta to $67 from $60, maintaining a Buy rating on the stock. This adjustment was influenced by Delta’s better-than-expected September quarter revenue guidance and the reinstated full-year 2025 EPS guidance, which suggests potential upside to consensus estimates.
Delta also increased its full-year 2025 EPS target to $5.30 from $4.65, reflecting an improved second-half 2025 unit revenue forecast. The airline’s strategic initiatives, such as expanding premium services and forming new partnerships, are expected to drive future growth. Delta’s Q2 performance included a pretax income of $1.8 billion and an operating margin of 13.2%. The company continues to focus on premium offerings and innovative technologies to enhance efficiency and customer experience.
Additionally, Delta announced a 25% increase in its quarterly dividend, demonstrating confidence in its financial health and commitment to returning value to shareholders. Despite industry challenges, Delta’s diverse revenue streams and strong loyalty program contribute to its robust market position. Investors are closely watching Delta’s strategic moves and financial health as the company navigates an evolving market landscape.
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