Is It Time To Reconsider Delta Air Lines (DAL) After Recent Share Price Pullback

Simply Wall St

Tue, February 24, 2026 at 4:11 PM GMT+9 6 min read

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DAL

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If you are wondering whether Delta Air Lines stock is priced attractively today, this article will walk through what the current market price might be implying about its value.

Delta most recently closed at US$66.88, with returns of 10.1% over 1 year and 81.7% over 3 years. Over the past 7 days the stock has seen a 3.1% decline and over the past 30 days it has seen a 1.6% decline, and it is down 3.2% year to date.

Recent headlines around major US airlines, including Delta, have focused on ongoing capacity adjustments, operational reliability and industry wide cost pressures. These factors help frame how investors view the sector. At the same time, discussion about travel demand trends and airline balance sheet strength has stayed in the spotlight, giving more context to the way Delta's share price has moved.

Simply Wall St currently gives Delta Air Lines a valuation score of 6 out of 6. Next we will walk through the standard valuation methods behind that score, before finishing with a different way to think about what fair value might mean for you as an investor.

Find out why Delta Air Lines’s 10.1% return over the last year is lagging behind its peers.

Approach 1: Delta Air Lines Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s dollars to estimate what the entire business might be worth right now.

For Delta Air Lines, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model based on cash flow projections. The latest twelve month free cash flow is about $3.16b. Analyst estimates and subsequent extrapolations by Simply Wall St point to projected free cash flow of $4.98b in 2029, with a full set of yearly projections out to 2035 used in the model.

When these projected cash flows are discounted back, the model arrives at an estimated intrinsic value of $126.93 per share. Compared with the recent share price of $66.88, the DCF output suggests the stock is 47.3% undervalued according to this framework.

This is a single model and it relies heavily on long term cash flow assumptions. On these inputs, Delta’s current price screens as materially below the DCF estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Delta Air Lines is undervalued by 47.3%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.

DAL Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Delta Air Lines.

Story Continues  

Approach 2: Delta Air Lines Price vs Earnings

For a profitable company like Delta, the P/E ratio is a useful shorthand for how much investors are currently paying for each dollar of earnings. It links the share price directly to the bottom line, which many investors focus on first.

What counts as a “normal” or “fair” P/E ratio usually reflects two things: how quickly earnings are expected to grow, and how risky those earnings are perceived to be. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk tends to justify a lower P/E.

Delta currently trades on a P/E of 8.68x. That sits below the Airlines industry average of 10.12x and well below the broader peer group average of 38.17x. Simply Wall St also calculates a proprietary “Fair Ratio” for Delta of 15.89x, which is the P/E level it might trade on given factors like its earnings profile, industry, profit margins, market cap and risk characteristics.

This Fair Ratio can be more informative than a simple industry or peer comparison because it incorporates company specific factors rather than treating all airlines or peers as identical. With Delta’s actual P/E of 8.68x below the Fair Ratio of 15.89x, this approach indicates the shares screen as undervalued on earnings.

Result: UNDERVALUED

NYSE:DAL P/E Ratio as at Feb 2026

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 22 top founder-led companies.

Upgrade Your Decision Making: Choose your Delta Air Lines Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your story about a company tied to numbers like fair value, future revenue, earnings and margins, then linked directly to a financial forecast and a fair value that you can compare with the current share price to help you decide whether to buy, hold or sell.

On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors. They update automatically when new information such as news, guidance or earnings is added, so your story and valuation stay in sync with the latest data.

For Delta Air Lines, for example, one investor Narrative currently points to a fair value of about US$49 per share. Another points to roughly US$81 per share, and others sit in between at around US$63 and US$66. This shows how different views about future growth, margins and appropriate P/E multiples translate into different fair values that you can weigh against the current price.

For Delta Air Lines however we’ll make it really easy for you with previews of two leading Delta Air Lines Narratives:

🐂 Delta Air Lines Bull Case

Fair value in this bull case narrative: US$81.29 per share

Implied pricing gap: current price is about 17.7% below this fair value estimate

Revenue growth assumption: 4.75% a year

Analysts in this narrative see flat capacity helping protect margins, with more focus on premium, loyalty and international revenue, plus a 10 year UPS MRO agreement adding another income stream.

The story is built on revenue growing to US$68.4b and earnings of US$4.6b by about 2028, with the P/E moving up to 12.3x to 12.8x compared to a lower multiple today.

Key risks flagged include softer main cabin demand, pressure from low cost competitors, potential tariffs on aircraft and a still cautious corporate travel market.

🐻 Delta Air Lines Bear Case

Fair value in this bear case narrative: US$63.21 per share

Implied pricing gap: current price is about 5.8% above this fair value estimate

Revenue growth assumption: 3.5% a year

This author focuses on Delta's strong unit economics and profitability per seat mile, but argues that much of the good news is already reflected in the share price.

The fair value view is anchored to more cautious assumptions, including lower revenue growth, a future P/E of 10x to 11x and concerns about thinner upside from here.

Main risks highlighted are a stretched balance sheet that could be exposed to shocks, plus tariff policy and weaker economic conditions that could weigh on travel demand, especially on important transatlantic routes.

These two narratives show how the same set of facts can support very different fair value views. If you want to see the full reasoning, including detailed forecasts and valuation logic, you can use them as starting points, compare the assumptions with your own and decide which story feels closer to how you see Delta Air Lines.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there’s more to the story for Delta Air Lines? Head over to our Community to see what others are saying!

NYSE:DAL 1-Year Stock Price Chart

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include DAL.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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