Is Delta Air Lines Stock a Buy After a Strong Earnings Report?

Sun, Sep 14, 2025, 5:15 PM 5 min read

• Delta's June-quarter results showed healthy profitability and reaffirmed full-year guidance.

• Premium demand remains firm while main cabin is soft, and management is reallocating capacity.

• Shares trade around 10 to 11 times this year's expected earnings, leaving room if execution stays on track.

• 10 stocks we like better than Delta Air Lines ›

Last Wednesday, Delta Air Lines (NYSE: DAL) delivered a strong June-quarter update and reiterated its 2025 outlook, helping steady sentiment after a choppy year for airlines. The Atlanta-based carrier, one of the largest global network airlines, highlighted resilient premium demand, steady co-brand card economics, and progress on costs -- all while acknowledging ongoing softness in economy seats.

The mix between main cabin and premium cabins has become a key storyline for Delta. Premium revenue and loyalty economics are doing more heavy lifting, while management trims weaker main cabin flying and leans into higher-margin products. With this backdrop, are shares a buy? More specifically, with guidance intact and premium resilience evident, do shares offer an attractive risk-reward today?

If there's a meaningful slowdown in travel, Delta isn't seeing it. The company's second quarter produced record revenue and double-digit margins, giving management enough confidence to reiterate its full-year guidance. In the quarter, operating revenue was roughly $16.6 billion, operating margin was 13%, and earnings per share landed at $2.10 on the company's non-GAAP basis. Management guided the September quarter to flat to up low-single-digit revenue growth year over year and a 9% to 11% operating margin, and reaffirmed full-year targets for earnings per share of $5.25 to $6.25 and free cash flow of $3 billion to $4 billion.

Beyond the headline numbers, the mix story stood out. Management said in the company's second-quarter earnings call that "main cabin margins remain soft," while reiterating that diversified revenue streams -- credit card remuneration, loyalty, and premium cabins -- now represent a large slice of the business. That matches comments on the call that softness is "largely contained to main cabin," with premium products and the Delta-American Express partnership offsetting the pressure.

Asked whether the premium outperformance would persist, Delta president Glen Hauenstein said, "there's nothing in any of the forward bookings that would have us indicate that there is a diminishing demand for premium cabins or services," adding that Delta continues to evaluate aircraft layouts to "put more and more premium" seats on board. In addressing main cabin weakness, Hauenstein explained that the company is removing the "weakest trips," often off-peak departures midweek or very early or late, to consolidate demand and improve unit revenues.