Delta Air Lines (DAL) Stock Forecast & Price Target

Delta Air Lines
Bear Case

Investors should be bearish about investing in Delta Air Lines, Inc. for these reasons:

• Fuel costs are reported to be about 40% higher year over year, which is a significant headwind for profitability, as fuel is one of the largest operating expenses for airlines, and this increase could pressure margins despite healthy demand.
• Wall Street has cut its Delta Air Lines earnings estimates below the company's own guidance, with analysts slashing their forecasts while retaining their Buy ratings, indicating that the market is skeptical about the company's ability to meet its optimistic outlook in the face of rising costs and potential demand weakness.
• Delta Air Lines, Inc. faces a high bar for fourth-quarter revenue guidance, and investors may react negatively if management cuts earnings expectations without providing stronger sales growth, as the company's stock has already risen above sector turbulence, leaving little room for disappointment.
• The ongoing Iran war is increasing costs for customers, with Delta CEO Ed Bastian noting that all customers are paying more due to the conflict, which could lead to weaker consumer demand as higher fares may deter some travelers, particularly in the leisure segment.
• Short interest in Delta Air Lines, Inc. has increased, with 26,222,815 shares shorted as of the most recent record date, representing a 3.82% month-to-month increase, suggesting that some investors are betting against the stock's performance, possibly due to concerns about the sustainability of its recent gains and the impact of rising fuel costs.