Delta Air Lines, Inc. (NYSE: DAL)

Sector: Industrials Industry: Airlines CIK: 0000027904
Market Cap 45.93 Bn
P/B 2.20
P/E 9.18
P/S 0.72
ROIC (Qtr) 11.59
Div Yield % 0.96
Rev 1y % (Qtr) 2.85
Total Debt (Qtr) 20.27 Bn
Debt/Equity (Qtr) 0.97
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About

Investment thesis

Bull case

  • Strong operating cash flow of 8.34B provides robust 0.41x coverage of total debt 20.27B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 65.60B provides 3.24x coverage of total debt 20.27B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 8.34B provides exceptional 12.29x coverage of interest expenses 679M, showing strong debt service capability.
  • Tangible assets of 65.60B provide exceptional 7.08x coverage of deferred revenue 9.26B, showing strong service capability backing.
  • Operating cash flow of 8.34B fully covers other non-current liabilities 5.72B by 1.46x, showing strong long-term stability.

Bear case

  • Operating cash flow of 8.34B barely covers its investment activities of (4.19B), with a coverage ratio of -1.99, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 8.34B provides thin coverage of dividend payments of (440M) with a -18.96 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 8.34B provides insufficient coverage of deferred revenue obligations of 9.26B, which is 0.90x, raising concerns about future service delivery capabilities.
  • Operating earnings of 6.86B show weak coverage of depreciation charges of 2.44B, with a 2.81 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 3.84B represents just -1.47x of debt issuance (2.61B), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Airline Destination Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Airlines
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DAL Delta Air Lines, Inc. 45.93 Bn 9.18 0.72 20.27 Bn
2 UAL United Airlines Holdings, Inc. 37.05 Bn 11.05 0.63 31.04 Bn
3 LUV Southwest Airlines Co 29.18 Bn 66.17 1.04 5.98 Bn
4 AAL American Airlines Group Inc. 9.42 Bn 15.65 0.17 36.06 Bn
5 ALK Alaska Air Group, Inc. 6.72 Bn 67.15 0.47 6.89 Bn
6 SKYW Skywest Inc 4.33 Bn 10.12 1.07 2.47 Bn
7 AERO Grupo Aeromexico, S.A.B. de C.V. 2.64 Bn 7.49 0.49 4.06 Bn
8 JBLU Jetblue Airways Corp 2.20 Bn -3.66 0.24 9.42 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.78 0.75
EV to Cash from Ops. EV/CFO 7.57 -1.78
EV to Debt EV to Debt 3.11 1.92
EV to EBIT EV/EBIT 9.20 12.70
EV to EBITDA EV/EBITDA 7.64 -7.83
EV to Free Cash Flow [EV/FCF] EV/FCF 16.42 4.43
EV to Market Cap EV to Market Cap 1.37 2.37
EV to Revenue EV/Rev 1.00 1.05
Price to Book Value [P/B] P/B 2.20 0.89
Price to Earnings [P/E] P/E 9.18 14.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 11.38 22,529.03
Dividend Payout Ratio % Div Payout % (Qtr) 8.80 7.43
Dividend per Basic Share Div per Share (Qtr) 0.68 0.11
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 11.49 -2.56
Interest Coverage Int. cover (Qtr) 10.11 1.76
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 12.47 -69.47
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 40.44 40.07
Dividend Growth (1y) % Div 1y % (Qtr) 35.20 2.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 38.47 -58.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.86 80.32
EBIT Growth (1y) % EBIT 1y % (Qtr) 26.99 -22.88
EBT Growth (1y) % EBT 1y % (Qtr) 32.78 -112.97
EPS Growth (1y) % EPS 1y % (Qtr) 43.23 -167.26
FCF Growth (1y) % FCF 1y % (Qtr) 33.21 2,772.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.48 7.74
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.78 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.01
Cash Ratio Cash Ratio (Qtr) 0.16 0.24
Current Ratio Curr Ratio (Qtr) 0.40 0.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.97 0.61
Interest Cover Ratio Int Coverage (Qtr) 10.11 1.76
Times Interest Earned Times Interest Earned (Qtr) 10.11 1.76
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.70 5.51
EBIT Margin % EBIT Margin % (Qtr) 10.83 -0.22
EBT Margin % EBT Margin % (Qtr) 9.76 -3.82
Gross Margin % Gross Margin % (Qtr) 46.60 41.52
Net Profit Margin % Net Margin % (Qtr) 7.90 -4.40