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Opinions David Dietze
Delta Air Lines IncDALBUYSep 05, 2017
David DietzeStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Premium contentWe reiterate DAL as a TOP PICK as it expects 9 million passengers to have flown this holiday season with November setting a record high. It trades at 8x earnings, under 3x book and supports a 49% ROE. Quarterly cash flows were up, while debt was being reduced. We continue to recommend a stop at $30, looking to achieve $53 -- upside over 25%. Yield 0.5%
(Analysts’ price target is $53.47)
Premium contentAs the US just achieved the busiest air travel day in history, we reiterate DAL as a TOP PICK. It trades at 7x earnings and supports a ROE of 49%. Quarterly cash reserves are growing as debt is retired and shares bought back. We recommend trailing up the stop (from $26) to $30, looking to achieve $53 -- upside potential of 40%. Yield 0.5%
(Analysts’ price target is $53.47)There is lots of pessimism in airlines now and airlines are trading at 2020 prices even though the situation is much better. It is the best managed airline in North America and rated the number one airline for the past several years by the wall Street Journal. It is trading at 5 1/2X this year's and next year's earnings.
He also talked about Air Canada which is also at an attractive price. The demand is roaring back but the capacity is well down from 2019. Advance ticket sales are way up. In general the airlines are keeping the supply tight.
Buy 22 Hold 0 Sell 0
Teal LindePremium contentAs passenger demand returns, DAL is a premium brand with significant free cash flow generation that is offering good value here. It trades at 6x earnings, 2.2x book and supports a 49% ROE. Quarterly cash reserves are growing again, while the company retires debt. We recommend placing a stop-loss at $26, looking to achieve $42 -- upside potential of 31%. Yield 0.6%
(Analysts’ price target is $53.94)
He wouldn't sell a share. Operations and results vs. two years are much much higher. Earnings estimates for 2023 are 30% higher than when the year started. Trades at 6x forward.
Jim Lebenthal
DAL is up 41% YTD. It reports July 13, with expectations of $14.3B sales and $2.33 EPS. Earnings could double this year on higher fares and lower fuel costs. Debt is still high at 4X cash flow but that is common for the sector. It remains very cheap at 7X earnings and continues to benefit from the travel recovery. A bad recession could hurt, but recent economic numbers have been fine. We like it today.
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Passenger counts are through the roof. Estimates for airline stocks keep rising, but they've gotten no love. He's bullish airlines.
Jim LebenthalMost airline stocks are trading near their 2020 levels despite the major increase in business. Delta is thought to be the best managed airline in North America and this is backed up by a number of surveys. It is a favourite of Wall Street analysts. It is trading at 6X this year's expected earnings as compared to a historical level of 9X so it is well priced. It does not pay a dividend. Buy 21 Hold 0 Sell 0
Teal LindeNot worried about tomorrow's report, because he strongly believes in the CEO. As for AA's guidance today, AA actually increased their estimates last month. The problem is that street's estimates got ahead of itself. Wants to know how international travel is doing this year, after domestic travel did gangbusters last year.
Jim Lebenthal
Transportation stocks have had a kind of bumpy last few months, and have pulled back down, so are more attractive on a valuation perspective. He generally likes airlines. The business has been rationalized as they have "whittled down" to a large handful of players. They seem to be competing less on price, therefore respecting one another’s margins. Labour, etc. seems to have been put in the background. With global economy improving, they are able to keep prices high. This has a PE of less than 10.