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1. Company Snapshot

1.a. Company Description

Delta Air Lines, Inc.provides scheduled air transportation for passengers and cargo in the United States and internationally.The company operates through two segments, Airline and Refinery.


Its domestic network centered on core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK, and Seattle; and international network centered on hubs and market presence in Amsterdam, Mexico City, London-Heathrow, Paris-Charles de Gaulle, and Seoul-Incheon.The company sells its tickets through various distribution channels, including delta.com and the Fly Delta app, reservations, online travel agencies, traditional brick and mortar, and other agencies.It also provides aircraft maintenance and engineering support, repair, and overhaul services; and vacation packages to third-party consumers, as well as aircraft charters, and management and programs.


The company operates through a fleet of approximately 1,200 aircrafts.Delta Air Lines, Inc.was founded in 1924 and is based in Atlanta, Georgia.

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1.b. Last Insights on DAL

Breaking News: Delta Air Lines reported a recent strategic shift toward premium products driving margin expansion. Premium revenue rose 7% and MRO services jumped 25% year-over-year. The company has a Buy rating with a raised target price of $78. Delta edges out American Airlines with earnings beats, dividend hikes, and stronger price gains. 2026 guidance signals revenue and margin growth, backed by record early bookings and robust corporate demand. Analysts recommend a Buy on the stock.

1.c. Company Highlights

2. Delta Air Lines' Strong Q4 2025 Earnings: A Bright Outlook for 2026

Delta Air Lines' fourth-quarter 2025 earnings report revealed a strong close to the company's centennial year, with record revenue of $58.3 billion, an operating margin of 10%, pretax income of $5 billion, and earnings of $5.82 per share. The company's free cash flow reached $4.6 billion, the highest in Delta's history, with a return on invested capital of 12%. As noted by CEO Ed Bastian, the company's strength lies in its brand and competitive advantages, which are expected to drive future growth.

Publication Date: Jan -14

📋 Highlights
  • Record Revenue and Earnings:: Delta achieved $58.3 billion revenue, $5.82 EPS, and a 10% operating margin in Q4 2025, with free cash flow of $4.6 billion, the highest in its history.
  • 2026 Guidance:: Full-year EPS projected to grow 20% YoY to $6.50–$7.50, with Q1 operating margin of 4.5%–6% and revenue growth of 5%–7% in March.
  • Fleet Expansion:: Ordered 30 Boeing 787-10s (with 30 options) for 2031+ delivery, enhancing cargo efficiency and wide-body fleet diversity, with $3B+ MRO revenue growth goals.
  • Revenue Diversification:: Non-main cabin revenue mix expected to reach 65–70% by 2026, driven by premium cabins and loyalty programs, outperforming industry peers.
  • Financial Targets and Shareholder Returns:: Aims for one-turn leverage by 2026, with potential share repurchases, and maintains disciplined CapEx, focusing on margin-driven free cash flow ($3B–$4B in Q1 2026).

Financial Performance

The company's financial performance was robust, with a significant increase in revenue and profitability. The earnings per share (EPS) of $5.82 exceeded expectations, and the free cash flow generation was a highlight, driven by margins and operating cash flow. With a P/E Ratio of 8.99 and an EV/EBITDA of 6.44, the company's valuation metrics indicate a reasonable pricing.

Guidance for 2026

For 2026, Delta expects earnings per share growth of 20% year over year, with revenue growth of 5% to 7%. The company forecasts free cash flow of $3 billion to $4 billion and an operating margin of 4.5% to 6% in the first quarter. Full-year EPS is expected to be $6.50 to $7.50, representing 20% year-over-year growth. Analysts estimate next year's revenue growth at 5.6%, slightly below the company's guidance.

Fleet Expansion and Efficiency

Delta has ordered 30 Boeing 787-10s with options for 30 more, set for delivery starting in 2031. This move is expected to boost the diversity of Delta's wide-body order book and create cost-efficient scale. The company's focus on fleet expansion and efficiency is likely to drive future growth and profitability.

Operational Reliability and Recoverability

CEO Ed Bastian noted that while Delta has a strong foundation in operational reliability, there is still work to be done, particularly in terms of recovery from irregular operations. The company is working to improve its recoverability and maintain its leadership in reliability.

MRO Business

Delta's MRO business is expected to experience revenue growth and margin expansion, with a goal of reaching $3 billion in top-line revenue. The company's unique capability in MRO is seen as a strong growth opportunity.

Revenue Diversification

Delta's revenue diversification has led to a higher non-main cabin revenue mix, expected to continue growing, potentially reaching 65-70% in the coming years. The company's product segmentation strategy is producing results above internal projections and is expected to be a multibillion-dollar opportunity in the future.

Shareholder Returns

As Delta gets closer to its two-turn leverage goal, it will explore opportunities to increase shareholder returns, including potential share repurchases. The company's focus on financial discipline and cash flow generation is expected to drive shareholder value.

3. NewsRoom

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Sell… Sell… Sell… Another Eight Companies Insiders Are Exiting

Feb -22

Source: investorplace.com

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Here's Why Delta Air Lines (DAL) Fell More Than Broader Market

Feb -19

Source: zacks.com

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UATP Partners with MICA to Bring Credential-less Multi-Tender Payment Solution to Merchants

Feb -19

Source: prnewswire.com

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DAL vs. AAL: Which Airline Stock Is a Stronger Play Now?

Feb -19

Source: zacks.com

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Delta Air Lines: Deleveraging, Margin Discipline, And Valuation Upside

Feb -19

Source: seekingalpha.com

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Market Today: Moderna rebounds; oil and gold jump

Feb -18

Source: gurufocus.com

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Three Stocks Insiders Are Selling in Droves

Feb -15

Source: investorplace.com

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Caprock Group LLC Makes New Investment in Delta Air Lines, Inc. $DAL

Feb -15

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.10%)

6. Segments

Airline

Expected Growth: 6.5%

The Airline segment is expected to grow faster than the global average due to increasing demand for air travel, driven by economic growth and a recovering global economy. Delta's strong brand and operational efficiency will also contribute to its growth.

Refinery

Expected Growth: 4.5%

The Refinery segment is expected to grow at a slower rate due to the volatility of the refining industry and the potential for fluctuations in crude oil prices and refining margins. However, the refinery's output is partly used by Delta's Airline segment, providing a stable demand.

Intersegment Sales/Other

Expected Growth: 5.0%

The growth of Intersegment Sales/Other is tied to the activities of the Airline and Refinery segments. As these segments grow, the intersegment transactions are likely to increase, driving growth in this segment, albeit at a moderate rate due to the eliminations of intersegment transactions.

7. Detailed Products

Delta One

Delta One is a premium business class product offered on long-haul international flights, featuring lie-flat beds, gourmet meals, and personalized service.

Delta Premium Select

Delta Premium Select is a premium economy product offered on select international flights, featuring more legroom, adjustable headrests, and upgraded amenities.

Delta Comfort+

Delta Comfort+ is an economy class product that offers more legroom, priority boarding, and dedicated overhead bin space.

Main Cabin

Main Cabin is Delta's economy class product, offering affordable fares and standard amenities.

SkyMiles

SkyMiles is Delta's loyalty program, allowing members to earn and redeem miles for flights, upgrades, and other rewards.

Delta Vacations

Delta Vacations is a vacation package product that bundles flights, hotels, and car rentals for a seamless travel experience.

Delta Cargo

Delta Cargo is a cargo shipping service that offers fast and reliable transportation of goods worldwide.

Delta Private Jets

Delta Private Jets is a private jet charter service that offers luxury travel experiences for individuals and groups.

8. Delta Air Lines, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Delta Air Lines faces moderate threat from substitutes such as trains, buses, and carpooling for short-distance travel. However, for long-distance travel, air travel remains the most convenient option, reducing the threat from substitutes.

Bargaining Power Of Customers

Delta Air Lines faces high bargaining power from customers due to the availability of multiple airlines and online travel agencies, allowing customers to compare prices and services easily.

Bargaining Power Of Suppliers

Delta Air Lines has a low bargaining power from suppliers due to its large scale of operations and long-term contracts with suppliers, giving it negotiating power.

Threat Of New Entrants

Delta Air Lines faces a low threat from new entrants due to the high barriers to entry in the airline industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

Delta Air Lines operates in a highly competitive industry with intense rivalry among major airlines, leading to frequent price wars and advertising campaigns.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 71.07%
Debt Cost 4.24%
Equity Weight 28.93%
Equity Cost 10.80%
WACC 6.14%
Leverage 245.66%

11. Quality Control: Delta Air Lines, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
General Dynamics

A-Score: 6.3/10

Value: 4.1

Growth: 4.7

Quality: 5.9

Yield: 4.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Paychex

A-Score: 6.0/10

Value: 2.1

Growth: 5.8

Quality: 9.0

Yield: 7.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Fastenal

A-Score: 5.5/10

Value: 0.7

Growth: 5.8

Quality: 7.8

Yield: 4.0

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Grainger

A-Score: 5.1/10

Value: 2.4

Growth: 7.8

Quality: 6.7

Yield: 2.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Lockheed Martin

A-Score: 5.1/10

Value: 2.8

Growth: 5.1

Quality: 4.5

Yield: 6.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Delta

A-Score: 4.9/10

Value: 7.1

Growth: 6.7

Quality: 5.1

Yield: 1.0

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

69.44$

Current Price

69.44$

Potential

-0.00%

Expected Cash-Flows