Goldman Sachs Sees Delta's Long-Term Growth On Track: EPS To Hit $9.50 By FY26
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 21 2024
0mins
Source: Benzinga
Delta Air Lines Financial Outlook: Analyst Catherine O’Brien from Goldman Sachs highlighted Delta's financial targets, including mid-teens operating margins and significant annual free cash flow, while reaffirming its fourth-quarter guidance and outlining growth expectations for 2025.
Investment Recommendations: O’Brien maintained a Buy rating on Delta, noting the airline's strong balance sheet and premium product strategy, which supports high margins and stable demand; investors can consider exposure through specific ETFs.
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Analyst Views on DAL
Wall Street analysts forecast DAL stock price to rise
18 Analyst Rating
18 Buy
0 Hold
0 Sell
Strong Buy
Current: 83.140
Low
77.00
Averages
83.50
High
90.00
Current: 83.140
Low
77.00
Averages
83.50
High
90.00
About DAL
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company has hubs and markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Santiago (Chile), Sao Paulo, Seattle, Seoul-Incheon, and Tokyo. Its segments include Airline and Refinery. Its airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and includes its loyalty program, as well as other ancillary businesses. Its refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel as well as non-jet fuel products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Bankruptcy Reorganization Failure: The airline ceased all operations on May 2, 2026, after failing to successfully reorganize, marking its exit from the aviation market despite its crucial role in keeping fares low, which has impacted pricing strategies across the industry.
- Acquisition Proposal Emerges: Mooney International has submitted a bid to acquire Spirit Airlines and related assets, aiming to combine operations to focus on affordable air travel, which, if successful, could restore the Spirit brand and its market position.
- Fare Increase Trend: The exit of Spirit Airlines has led to an average fare increase of $19 (approximately 14%) across about 90 routes, highlighting its significance in the market, with industry analysts noting that any airline's departure results in reduced seat supply, thereby driving up fares.
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- Brand Loyalty Shifts: The survey indicates that Target, Walmart, and Amazon are viewed as companies losing support, while Costco, Apple, and Kroger gained favor due to their strong DEI policies, reflecting the direct impact of brand image on consumer behavior.
- Significant Economic Impact: The National LGBT Chamber of Commerce estimates that LGBTQ+ consumers represent over $1.7 trillion in economic spending power in the U.S., compelling businesses to take their diversity and inclusion policies seriously to maintain market share.
- Corporate Responses and Challenges: While Amazon claims to continue supporting its employees and diverse customer base, Target faced backlash from both political sides over its DEI policies, leading to reduced sales in summer 2023, illustrating how corporate stances on DEI can significantly affect sales performance.
See More
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- Brand Impact: The survey identifies Target, Walmart, Amazon, Chick-Fil-A, and Home Depot as the companies most frequently linked to reduced spending, indicating that shortcomings in diversity and inclusion policies can lead to customer attrition.
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- Significant Market Potential: The National LGBT Chamber of Commerce estimates that LGBTQ+ consumers contribute over $1.7 trillion to the U.S. economy, suggesting that investments in diversity and inclusion are not only a moral obligation but also a strategic move to capture a substantial market share.
See More
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- Technical Evaluation Results: Delta Air Lines' joint technical evaluation with Vortex Control Technologies indicates that retrofitting its 737-800 and 737-900ER aircraft will significantly enhance fuel efficiency, covering 240 aircraft and marking a crucial advancement in operational economics.
- Emission Reduction and Energy Savings: The newly installed aerodynamic finlets will improve airflow patterns and reduce drag, helping Delta lower carbon emissions in line with its sustainability goals, especially considering that approximately 90% of its carbon emissions are linked to jet fuel consumption.
- Continuation of Operational Strategy: This retrofit is part of Delta's broader fleet modification strategy, having undergone safety and operational performance reviews to ensure the effectiveness and safety of the new technology, thereby further enhancing the company's operational efficiency.
- Positive Market Reaction: Delta's shares rose about 0.5% in premarket trading, reflecting market optimism regarding the implementation of new technology and demonstrating investor confidence in the company's future operational performance.
See More
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- Aerodynamic Installation: Delta Airlines will install Vortex Control Technologies' Finlet modification package on 240 Boeing 737-800 and 737-900ER aircraft, aiming to enhance fuel efficiency by improving airflow and reducing drag, thereby lowering operational costs and carbon emissions.
- Technical Collaboration Background: This modification is based on a comprehensive technical collaboration between Delta and VCT, including analysis of flight test data and engineering reviews of aerodynamic performance, ensuring the safety and effectiveness of the modifications, which further solidifies Delta's strategic decision to enhance fleet efficiency.
- Sustainability Commitment: With approximately 90% of Delta's carbon emissions originating from jet fuel consumption, the implementation of Finlets will significantly support its sustainability goals, helping the company reduce environmental impact while improving operational economics.
- Long-term Operational Benefits: Delta's Chief Sustainability Officer stated that the introduction of Finlets not only reflects technological innovation but will also provide long-term operational benefits, further enhancing the company's competitiveness in the global aviation market.
See More
Mixed Performance in US Stock Indices Amid Energy Sector Pressure
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- Oil Price Impact: WTI crude oil prices dropped over 3% to a 3.25-month low, easing inflation expectations and providing support for stocks and bonds, reflecting a cautious market outlook on future economic growth.
- Weak Housing Data: US May housing starts fell by 15.4% month-over-month to a six-year low of 1.177 million, below the expected 1.430 million, indicating potential challenges for economic recovery stemming from a sluggish real estate market.
- FOMC Meeting Focus: Market attention shifts to the two-day FOMC meeting, where rates are expected to remain unchanged, but the press conference led by new Chair Kevin Warsh will be pivotal in shaping future monetary policy directions.
See More
