DAL: Executing Through Fuel Headwind; Mgmt Meeting Takeaways

Research evidence excerpt

DAL: Executing Through Fuel Headwind; Mgmt Meeting Takeaways

Equity Research

Company Update — May 20, 2026

Airlines

Delta Air Lines, Inc.

Executing Through Fuel Headwind; Mgmt Meeting Overweight

Takeaways Price Target: $75.00

Our Call Ticker DAL

Upside/(Downside) to Target 10.7%

We met with CEO Ed Bastian and CFO Erik Snell and came away more constructive on

the LT durability of its investment case as best in class. Revenue trends remain strong and Price (05/19/2026) $67.76

profitability will scale up as fuel prices normalize. We remain Overweight. 52 Week Range $45.28 - 76.39

Market Cap (MM) $44,180

2Q Trends Remain Strong - Cash sales are trending up 15-20% YoY in 2Q with little Enterprise Value (MM) $58,479

sign of diminishing demand in spite of multiple industry-wide fare increases. Strength is Average Daily Value (MM) $768

evident across products, with main cabin up MSD YoY complementing stronger growth Dividend Yield 1.0%

in Premium and Corporate. 2Q guide appears on track for low-teens revenue growth and

$1.00-$1.50 of EPS. This comes as fuel presents a $2b headwind to the quarter, only $ (Dec) Q1 Q2 Q3 Q4 FY

partially offset by $200-$300m (~25c/gallon) from Delta's refinery. EPS

2026E 0.64 A 1.45 E 1.76 E 1.95 E 5.80 E

Pricing Is Resilient and Likely Sticky - Delta noted fuel shocks have been necessary for 2027E 0.87 E 2.64 E 2.42 E 2.28 E 8.20 E

the industry to take fares higher. While the company believes incremental increases are

Source: Company Data, Wells Fargo Securities estimates, and Factset.

generally over, it expects price to be sticky even as fuel declines, as most carriers don't NA = Not Available, NC = No Change, NE = No Estimate

have margin to work with and there is less appetite from competitors for share gains.

Fares have also lagged inflation.