Key insights
- BMO reiterated an outperform rating on Delta due to lower fuel prices after the Strait of Hormuz reopened, potentially boosting EPS above guidance. Delta's attractive valuation (low P/E and PEG) and revenue diversification support a positive outlook. However, 15 analysts revised earnings downwards, and the macro environment remains volatile, limiting the bullish impact.
Investing.com - BMO Capital reiterated an Outperform rating and $80.00 price target on Delta Air Lines (NYSE:DAL) stock.
The firm noted that fuel prices fell $0.65 to $0.70 today following the reopening of the Strait of Hormuz. BMO said the backdrop supports a better earnings per share outlook than management’s $1.00 to $1.50 second quarter guidance, which assumed higher energy prices. Delta currently trades at a P/E ratio of 9.58 with a PEG ratio of just 0.2, suggesting the stock remains attractively valued relative to its growth prospects.
Delta continues to diversify its revenue base, pay down debt, and strengthen brand loyalty, according to BMO. The firm sees a path for enhanced margins and reduced earnings volatility that could support a higher valuation framework.
BMO revised its 2026 earnings per share estimate for Delta to $5.48 from $5.80 prior. According to InvestingPro Tips, 15 analysts have revised their earnings downwards for the upcoming period, though the company remains profitable with diluted EPS of $6.85 over the last twelve months. Investors can access 6 additional ProTips and comprehensive analysis through Delta’s Pro Research Report, available exclusively on InvestingPro.
The analyst stated the macro environment remains volatile despite the supportive fuel price development.
In other recent news, Delta Air Lines reported impressive financial results for the first quarter of 2026, exceeding both earnings and revenue forecasts. The airline achieved earnings per share of $0.64, surpassing the forecasted $0.61, which marks a 4.92% surprise. Revenue was reported at $14.2 billion, exceeding the anticipated $13.97 billion and showing a 9.4% increase compared to the previous year. Evercore ISI reiterated an Outperform rating on Delta Air Lines, maintaining a price target of $80, citing easing fuel prices and a moderating capacity outlook as positive factors. Despite the strong revenue, higher non-fuel unit costs offset some gains, as they rose 6% compared to Evercore ISI’s 5% forecast. TD Cowen also updated its estimates, raising the price target for Delta Air Lines to $84 from $76 while maintaining a Buy rating. These adjustments followed Delta’s first-quarter update and conference call. Both firms highlight Delta’s resilience in managing fuel costs as a significant factor in their evaluations.
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