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On Thursday, Susquehanna analysts raised the price target on Delta Air Lines (NYSE:DAL) stock to $51 from $50 while maintaining a Positive rating. The adjustment follows Delta's first-quarter earnings report, which exceeded both Susquehanna's and consensus estimates. According to InvestingPro data, Delta currently trades at an attractive P/E ratio of 6.4x and appears undervalued based on Fair Value analysis.
Delta Air Lines reported adjusted earnings per share (EPS) of $0.46 for the first quarter, surpassing the midpoint of the guidance updated in March. This figure also outdid Susquehanna's projection of $0.40 and the consensus estimate of $0.38. The airline's performance, which generated $61.6 billion in revenue over the last twelve months, has been attributed to its competitive strategies and robust loyalty program, which are expected to bolster its revenue per available seat mile (RASM) even in a potential economic downturn. For deeper insights into Delta's financial health and growth potential, InvestingPro subscribers can access comprehensive analysis and additional metrics.
The Susquehanna analyst, Christopher Stathoulopoulos, highlighted Delta's ability to offer competitive pricing and value across different cabin classes. He noted that Delta's entry-level inventory is priced competitively against the U.S. domestic market and includes essential features such as in-seat entertainment, free Wi-Fi, and partnerships with vendors like Shake Shack (NYSE:SHAK). This strategy has contributed to Delta's strong market position, with the company maintaining a market capitalization of $28.4 billion and earning a favorable analyst consensus rating of 1.57 (Strong Buy).
Delta's strategic network geography and tactics have also been praised, with a focus on deploying the majority of its U.S. domestic capacity at its most profitable hubs. Additionally, the airline's loyalty program has seen solid credit card acquisitions in the first quarter, which supports the company's overall financial health.
The detailed analysis provided by Susquehanna includes a line-by-line review of Delta's results and guidance, which can be found on pages 3-5 of their report. The upgraded price target reflects confidence in Delta's continued strength and competitive advantage in the airline industry.
In other recent news, Delta Air Lines reported its Q1 2025 earnings, exceeding analysts' expectations with an earnings per share (EPS) of $0.46, compared to the forecasted $0.44. The airline achieved a record revenue of $14 billion, surpassing the anticipated $13.11 billion. Alongside this, Delta announced a 10-year maintenance agreement with UPS, signaling strategic partnerships aimed at long-term revenue diversification. Analyst firms have adjusted their outlooks on Delta, with TD Cowen raising the stock's price target to $50 and maintaining a Buy rating, while Bernstein reiterated an Outperform rating with a $56 target. Raymond (NSE:RYMD) James lowered its price target to $60 but kept a Strong Buy rating, reflecting confidence in Delta's strategic capacity management and cost control measures. Meanwhile, Citi reduced its price target to $62, maintaining a Buy rating, as it revised earnings projections due to a more conservative revenue forecast. Despite these adjustments, analysts continue to show confidence in Delta's ability to navigate the current economic environment. These developments highlight Delta's strategic positioning amid fluctuating market dynamics and broader challenges in the airline industry.
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