UBS raises Delta Air Lines target to $46, maintains Neutral

On Thursday, UBS analyst Thomas Wadewitz increased the price target for Delta Air Lines (NYSE:DAL) stock to $46.00, up from the previous $42.00, while keeping a Neutral rating on the shares. With the stock currently trading at $48.04 and a market capitalization of $31.37 billion, InvestingPro analysis suggests Delta is trading below its Fair Value, presenting a potential opportunity for investors.

The adjustment follows recent meetings with Delta’s management team, including CFO Dan Janki and senior vice presidents Joe Esposito and Roberto Ioriatti. During these discussions, Delta expressed a positive outlook on the steady demand trends observed in May, which align with those seen in April. The company’s management highlighted the consistent demand for corporate travel and the resilience of international and premium travel segments despite a backdrop of uncertainty. This positive outlook is supported by Delta’s strong financial performance, with a P/E ratio of 8.39 and net income of $3.66 billion in the last twelve months. For deeper insights into Delta’s valuation and financial health metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.

Moreover, Delta’s management provided insights into the current competitive landscape within the airline industry. They noted the quick adjustments made to capacity in response to a dip in demand experienced in February. Additionally, they mentioned that the strategic shift at Southwest Airlines (NYSE:LUV), emphasizing earning the right to grow, is seen as a positive development for the overall industry.

The airline’s commentary on the stability of demand and the favorable competitive environment contributed to UBS’s decision to raise the price target. However, the firm maintained its Neutral stance on Delta Air Lines stock, indicating a cautious optimism about the company’s prospects.

In other recent news, Delta Air Lines reported first-quarter adjusted earnings per share (EPS) of $0.46, surpassing both Susquehanna’s projection of $0.40 and the consensus estimate of $0.38. The airline’s performance was attributed to competitive strategies and a robust loyalty program. Following these results, Susquehanna raised Delta’s price target to $51, maintaining a Positive rating, while TD Cowen increased their target to $50, reiterating a Buy rating. Bernstein also maintained an Outperform rating with a $56 target, citing potential stabilization in Delta’s financial performance.

Meanwhile, Raymond (NSE:RYMD) James adjusted their price target to $60 from $62, reaffirming a Strong Buy rating as Delta plans to limit capacity growth to preserve profit margins. Citi analysts revised their price target from $72 to $62, maintaining a Buy rating, reflecting a more conservative revenue forecast. Despite these adjustments, Citi remains confident in Delta’s cost management abilities. Overall, these developments highlight Delta’s strategic positioning amid evolving market conditions.

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