Freedom Broker analysts raise Delta’s target price after a strong quarter

Delta Air Lines (DAL) has proven to the market that it can grow revenue and maintain business resilience even amid record-high jet fuel prices. According to Freedom Broker analysts, it is the quality of revenue and the growth of high-margin segments that enable the company to remain one of the most attractive stories in the aviation sector. Against this backdrop, experts raised Delta’s target price to $103 and maintained a “Buy” rating.

Why Delta shares could rise

Delta Air Lines is among the world’s largest airlines by passenger traffic volume, fleet size, and route network. The company is one of the founders of the SkyTeam international airline alliance and operates routes in North and South America, Europe, Asia, Africa, and the Middle East.

The past quarter reinforces the investment thesis that Delta is not merely a cyclical aviation-sector asset, but a high-quality transportation platform with diversified sources of income, experts note.

In their view, the key factor was not only the recovery in passenger demand, but also the company’s ability to raise prices, develop the premium segment, monetize loyalty programs, and increase revenue from non-core business lines.

Previously, Delta warned of a possible increase in fuel costs by more than $2 billion per quarter due to the conflict in the Middle East and temporarily отказалась от expanding capacity. The company also revised some environmental initiatives, including plans to use sustainable aviation fuel.

Delta’s financial results beat market expectations

In the second quarter of 2026, Delta reported adjusted revenue of $17.7 billion, up 13.9% from a year earlier. Adjusted earnings per share (EPS) came in at $1.56, beating the analysts’ consensus forecast by 4.5%.

According to the published results, operating profit for the period fell by 11% to $1.9 billion. Net profit declined even more—by 25% to $1.6 billion. Operating revenue increased to $19.8 billion compared with $16.7 billion in the second quarter of 2025.

Management reaffirmed its full-year 2026 adjusted EPS guidance of $6.50–7.50, which is significantly above the market consensus of $5.97 per share. The company also expects free cash flow in the range of $3–4 billion.

Growth drivers: premium segment and loyalty programs

Freedom Broker analysts point to an улучшение in the company’s revenue mix. Total passenger revenue rose to $15.6 billion (+12.5% year over year). Revenue from premium tickets increased by 17.3% to $6.9 billion, while доходы from loyalty programs and related services reached $1.34 billion, up 19.3%.

The partnership with American Express stands out in particular, bringing Delta $2.4 billion in revenue, 16% more than a year earlier. According to Freedom Broker analysts, a particularly important signal was the recovery of demand in economy class. Revenue from economy-class ticket sales reached $6.9 billion, increasing 7.9% year over year. This indicates an expansion of the growth base beyond the premium segment.

Maintenance and cargo operations strengthen the investment case

Additional business lines also posted strong results. Revenue from the aircraft maintenance, repair and overhaul (MRO) unit increased by 31.8% to $315 million. Cargo revenue rose by 38.7% to $294 million.

Freedom Broker notes that this business diversification is what выгодно distinguishes Delta from many competitors. The company’s management expects MRO revenue for full-year 2026 to reach about $1.2 billion, which is roughly 50% higher than last year’s level.

Fuel price growth remains the main risk

In the second quarter, adjusted fuel expenses surged by 76.6% year over year, reaching a record $4.4 billion. The average fuel price rose by 74.7% to $3.93 per gallon.

Despite the challenging external environment, the latest results show that Delta is successfully offsetting pressure on margins through higher fares, expansion of the premium segment, loyalty programs, and additional revenue sources. These factors were the basis for Freedom Broker analysts raising Delta’s target price to $103 while maintaining a “Buy” rating.

Not an individual investment recommendation.