UAL and DAL: TD Cowen assesses the perspective within the wider S&P 500 universe

Investing.com -- United Airlines and Delta Air Lines stand out as attractive opportunities within the S&P 500, according to TD Cowen, which highlighted their growth potential relative to the broader index in a note to clients on Tuesday.

TD Cowen highlighted that “there are 47 stocks in the index trading at a single-digit P/E against CY2026 consensus EPS. Of these, ~14 are expected to grow EPS at a faster clip than the broader index. UAL and DAL are both among the top ten.” 

Specifically, the bank said consensus places United in sixth place with 24.7% EPS growth expected and Delta ninth with 20.8% EPS growth.

The firm argues that this dynamic, paired with a “rapidly improving industry outlook,” creates a favorable setup. 

While airline valuations compressed sharply in the post-pandemic period, both carriers’ shares have re-rated from low single-digit to high single-digit P/E multiples. 

Investor sentiment, TD Cowen says, has improved as “secular changes to the post-COVID competitive landscape have created a favorable dynamic for full-service airline margins.”

The bank believes United and Delta also benefit from stronger capital allocation stories than peers. 

The industry backdrop is supportive too: “The industry looks set to enter 2026 without a policy adjustment overhang, an easy set of comps due to the 1H25 demand deceleration, and customers… who can plan with more certainty,” TD Cowen wrote. 

The analysts add that a dovish monetary policy shift may also bolster consumption and valuations.

The firm highlights idiosyncratic advantages, such as United’s “gauge tailwind from its fleet overhaul” and both carriers’ expansion of loyalty partner ecosystems. 

Overall, TD Cowen concludes that UAL and DAL “still offer investors an attractive opportunity to outperform whether relative to the rest of the US airline sector or to the broader market.”