This summer, Delta Air Lines DAL plans to fly nonstop to Copenhagen and Stockholm, as well as to more than 35 destinations across Scandinavia, through its partnership with Scandinavian Airlines System ("SAS"), the flag carrier of Denmark, Norway, and Sweden. We remind investors that DAL and SAS inked a codeshare agreement last year to improve connectivity between North America and Scandinavia.
Under the expansion-oriented move, DAL will operate non-stop flights (thrice a week) on the Minneapolis–St. Paul to Copenhagen route from May 22. Additionally, a direct summer service from New York–JFK to Copenhagen and JFK to Stockholm will start on April 14. These flights will operate daily. Moreover, out of the 35 additional destinations, six are in Denmark, 14 are in Norway and 15 in Sweden.
The move to expand in Scandinavia is a prudent one by Delta because demand for long-haul travel remains buoyant, even in the tariff-induced uncertain scenario. In the first quarter of 2025, DAL’s international revenues were up 7% year over year. Given this move, the question that naturally arises is how investors should approach DAL stock. Let us delve deeper.
Impressive Price Performance of DAL Stock
Over the past 30 days, shares of Delta have performed well, gaining 24.9%, above the Zacks Transportation- Airline industry’s 23.1% uptick and fellow airline player American Airlines’ AAL 15% gain in the same timeframe. Another airline heavyweight, United Airlines UAL, has performed even better, gaining 30.9% in the past month.
1-Month Price Comparison
Zacks Investment Research
Image Source: Zacks Investment Research
Signs of Easing Trade Tensions Aid DAL Stock
The airline industry, of which DAL is an integral part, has been badly hit by trade tensions. Economic uncertainties and the resultant reduction in consumer and corporate confidence, which hurt domestic air travel demand, prevented airline stocks from gaining altitude.
Against this backdrop, the signs of easing trade tensions, which emanated from late last month, are highly welcome. President Trump and Treasury Secretary Scott Bessent hinted that the 145% tariffs on Chinese goods could be reduced soon. Bessent believes that the current scenario is “unsustainable.” Trump is also exploring pauses on certain tariffs, particularly on auto imports and some consumer electronics.
Bessent struck an optimistic tone during a private investor summit last month, suggesting that the current state of U.S.-China tariffs is not viable in the long term. He expects more "clarity" on tariffs in the months ahead. During Vice President JD Vance's visit to India last month, discussions included cooperation in technology, defense, and energy, with the White House noting “progress” on several fronts.
These updates on the possibility of trade tensions easing boosted airline stocks like DAL, which has a presence in multiple countries. The developments contributed to the Atlanta, GA-based airline company’s recent impressive share price performance. DAL and its alliance partners collectively serve over 120 countries and territories, with more than 800 destinations served globally.
Some Other Bright Features for DAL Stock
Low Fuel Costs: The southward movement of oil prices bodes well for Delta's bottom-line growth. This is because fuel expenses are a significant input cost for the aviation space. Crude oil is struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence and production increase by OPEC+ have all contributed to this downward pressure. As evidence, expenses on aircraft fuel and related taxes declined 7% year over year in the first quarter of 2025, aiding DAL’s bottom line. The oil price-induced cost relief could support margins and lend ticket pricing flexibility to airlines like DAL in this uncertain era.
Shareholder-Friendly Approach: Highlighting its shareholder-friendly stance, DAL’s management recently approved a share repurchase program worth $1 billion. The buyback is anticipated to be completed no later than June 30, 2028. DAL also pays a quarterly dividend of 15 cents per share. Through dividends and buybacks, Delta intends to return over $2 billion to shareholders over the next three years. DAL’s dividend yield is currently pegged at 1.34%. In this scenario of uncertainty, DAL’s dividend-paying capacity is a positive for income-seeking investors. This highlights confidence in its cash flow and prospects.
Compelling Stock Valuation: DAL stock is quite cheap, as its Value Score of A does not suggest a stretched valuation at this moment. In terms of price-to-sales, DAL is trading at a forward sales multiple of 0.47, which is not only lower than the industry average but also other airline companies like American Airlines and United Airlines. American Airlines and United Airlines also currently have a Value Score of A, like DAL.
DAL’s P/S F12M Vs. Industry, AAL & UAL
Zacks Investment Research
Image Source: Zacks Investment Research
Still Not an Opportune Time to Buy DAL Stock
There is no doubt that the stock is attractively valued. The company’s shareholder-friendly initiatives, highlighted by its recent buyback approval, further add to its appeal. Its recent price surge is also impressive. The Wall Street average target price of $59.73 for DAL stock suggests an upside of more than 33% from current levels.
Zacks Investment Research
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Although signs of trade tensions easing have emerged, until a concrete trade deal is inked, we are not out of the woods as far as this uncertainty is concerned. In addition, high labor costs (expenses on salaries and related costs were up 11% in 2024) are hurting the bottom line.
Given the current scenario, it is not at all advisable to buy this Zacks Rank #3 (Hold) stock. Investors should monitor the company’s developments closely for an appropriate entry point. For those who already own the DAL stock, it will be prudent to stay invested.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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