NYSE · Air Transportation, Scheduled
Quote as of Oct 9, 2:31 PM ET · delayed
Fairly Valued. Our fair value estimate is USD 74.90 against a price of USD 81.28, -8% implied downside. Reasoning and scenarios are in Delta Air Lines stock: record revenue meets a fuel-cost squeeze.
Delta AIR Lines declared USD 0.68 per share in dividends in FY2025, up 35.0% from USD 0.50 in FY2024. At USD 81.28 that is a 0.83% trailing yield. The dividend took 9% of FY2025 diluted EPS of USD 7.66.
Delta Air Lines stock has fresh evidence of pricing power, with record September-quarter revenue on flat capacity. Fuel and unit costs still ate into margins and cash flow, leaving the outlook to do the heavy lifting.
StockLarge CapIndustrialsRevenue (GAAP)
$20.186B
vs $16.673B (yr ago)
EPS (GAAP, diluted)
$1.15
vs $2.17 (yr ago)
Free Cash Flow (adjusted)
$463M
vs $833M (yr ago)
Gross Margin
Not disclosed
vs Not disclosed
Operating Margin (GAAP)
7.2%
vs 10.1% (yr ago)
What changed
Delta reported record September-quarter GAAP revenue of $20.186 billion, up 21% year over year, while adjusted operating revenue rose 16% on flat capacity. Higher fuel and other costs absorbed much of that growth: GAAP operating margin fell to 7.2% from 10.1%, and adjusted free cash flow declined to $463 million from $833 million. Management now expects approximately 20% December-quarter revenue growth and full-year EPS of $5.10 to $5.60.
Impact on thesis
The quarter supports the demand and revenue-mix thesis, but higher fuel and 7.3% adjusted non-fuel unit-cost growth keep cash conversion and margins under pressure. We set fair value at $75 per share using the newly disclosed full-year EPS outlook and an explicitly assumed 14x multiple; that is below the $82.14 share price, but the print does not warrant a separate change to the risk-heavy scenario framework.
SageNoodle Industrials & Energy Desk · 9 Oct 2026
Revenue (USD, billions)
Margins (%)
Free cash flow (USD, billions)
Estimated ROIC (%)
Net debt (USD, billions)
Monetary values are in USD; revenue, FCF and net debt are in billions; EPS is per share. Missing values appear as gaps and “Not available.” Source: SEC EDGAR XBRL filings, latest restated values; quarterly cash flow derived from year-to-date figures; Q4 = fiscal year minus nine months. ROIC is NOPAT (21% tax) over debt plus equity.
| Period | Revenue | Gross % | Op % | FCF | EPS | ROIC % | Net debt |
|---|---|---|---|---|---|---|---|
| FY2016 | 39.6 | Not available | 17.6 | Not available | 5.55 | 30.2 | 4.25 |
| FY2017 | 41.2 | Not available | 14.5 | Not available | 4.43 | 22.5 | 6.63 |
| FY2018 | 44.4 | Not available | 11.8 | Not available | 5.67 | 18.0 | 7.80 |
| FY2019 | 47.0 | Not available | 14.1 | Not available | 7.30 | 20.5 | 7.22 |
| FY2020 | 17.1 | Not available | -72.9 | Not available | -19.5 | -33.4 | 19.7 |
| FY2021 | 29.9 | Not available | 6.31 | Not available | 0.44 | 5.14 | 17.1 |
| FY2022 | 50.6 | Not available | 7.24 | Not available | 2.06 | 10.3 | 18.1 |
| FY2023 | 58.0 | Not available | 9.51 | Not available | 7.17 | 14.7 | 15.9 |
| FY2024 | 61.6 | Not available | 9.73 | Not available | 5.33 | 15.5 | 12.3 |
| FY2025 | 63.4 | Not available | 9.19 | Not available | 7.66 | 13.5 | 9.00 |
Current price
USD 81.28
Fair value estimate
USD 74.90
Implied upside
-7.9%
Bear
25%USD 55
Direct equity valuation using assumed forward EPS and price-to-earnings multiple.
Fuel and non-fuel cost pressure persist, keeping earnings near the lower end of guidance and limiting the value investors assign to those earnings. At $5.10 EPS and 10.7x earnings, the implied value is $54.57 per share.
Base
50%USD 75
Direct equity valuation using the midpoint of management’s FY2026 EPS guidance and an assumed 14x P/E.
Revenue momentum continues, but fuel and unit-cost growth restrain margin expansion. The 14x assumed multiple yields $74.90 per share.
Bull
25%USD 95
Direct equity valuation using assumed forward EPS and price-to-earnings multiple.
Strong passenger yields and diversified revenue growth persist, while costs moderate enough to support the upper end of the outlook and a higher assumed multiple. At $5.60 EPS and 16.96x earnings, the implied value is $94.98 per share.
| Q3 FY2026 | USD 75 | Fairly Valued | Record revenue on flat capacity strengthens the demand and mix case, but margin compression, higher fuel and lower adjusted free cash flow keep the valuation at $75 per share. |
Delta said that from October 2022 through July 2026, its joint venture with LATAM operated 83,000 flights, offered 20.8 million seats and carried 17.4 million customers. Delta reported combined capacity in 2026 was approximately 31% higher than in 2023, and that the network now includes 28 routes.
Why this matters
The commercial case for the alliance is stronger reach: shared connections can feed passengers onto routes that either airline might struggle to support alone. But the capacity increase also means more seats to fill, and Delta supplied no partnership-specific revenue, yield, cost or profit figures. The traffic totals establish scale; they do not show whether that scale earns attractive returns for Delta. Without those economics, the release supports a network argument, not a margin conclusion.