Delta Air Lines: Post call thoughts as DAL reaffirms EPS outlook from earlier in year

Research evidence excerpt

Delta Air Lines: Post call thoughts as DAL reaffirms EPS outlook from earlier in year

es Out 57,415 USD / 657.0

corporate mix improves, industry capacity discipline likely remains, booking curve (mn)

dynamics on international drives results, and bookings into the fall remain encouraging. Free Float 93.4%

Costs: building back to the long-term algorithm AverageBofA TickerDaily/ ExchangeValue (mn) 702.57DAL / USDNYS

Airlines have had unit cost inflation as capacity was cut with higher fuel while DAL also Bloomberg / Reuters DAL US / DAL.N

had pilot issues during irregular operations. While unit costs grew +6.8% in 2Q, these ROE (2026E) 19.2%

will moderate in 3Q, and we expect 4Q to continue to step down as capacity goes from Net Dbt to Eqty (Dec-2025A) 76.6%

+1% to potentially +3%. 2027 could be meaningfully better and return to the long-term

algorithm of low-single digit growth as capacity normalizes.

What DAL’s results mean for other airlines

UAL: United Airlines

Investor sentiment has been positive on airlines given pricing power and lower fuel

prices, and we previewed strong results and outlooks for the industry. Based on DAL’s DAL: Delta Air Lines

2Q unit revenues, we see less meaningful upside from other airlines and believe

expectations are fairly set. We still expect solid sequential unit revenue improvement

from airlines like UAL given easier comps and a step down in capacity growth. Marking

fuel to market is a headwind for others, which may limit some ability to guide to EPS

outlooks given earlier in the year like DAL.

A word on valuation after DAL’s re-rating

On our 2027E EBITDAR forecasts, DAL trades at 5.9x, at the higher end of the historical

4-6x range and above the 5.1x multiple this time last year. While DAL is exposed to