Is DAL a good stock to buy? We came across a bullish thesis on Delta Air Lines, Inc. on LongYield’s Substack. In this article, we will summarize the bulls’ thesis on DAL. Delta Air Lines, Inc.’s share was trading at $70.22 as of April 21st. DAL’s trailing and forward P/E were 10.40 and 12.61, respectively according to Yahoo Finance.
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Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. DAL delivered a strong Q1 2026 performance, reporting record March-quarter revenue of $14.2 billion, adjusted EPS of $0.64, and a 42% year-over-year increase in pre-tax income, comfortably beating expectations and reinforcing that demand strength, rather than cost discipline alone, is driving profitability. Management highlighted that eight of the top ten revenue days in Delta’s history occurred during the quarter, with bookings up 25% year over year, underscoring broad-based strength across both corporate and leisure travel.
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While GAAP pre-tax results showed a $214 million loss, this was driven by non-cash investment and hedging-related volatility, making the adjusted $532 million pre-tax profit the more meaningful reflection of operational performance. The most important underlying trend, however, is Delta’s continued transformation toward a structurally more profitable and resilient revenue mix, with premium cabins now growing 14% versus just 4% growth in the main cabin, effectively pushing premium offerings to a larger share of total passenger revenue than economy for the first time in the company’s history.
This shift is supported by durable demand drivers, including corporate travel contracts, highly sticky SkyMiles loyalty tiers, and the American Express co-brand partnership, which alone contributes over $2 billion per quarter in high-margin remuneration by monetizing everyday card spending into aviation-linked cash flows. This loyalty engine effectively functions as a financial services business embedded within the airline, providing meaningful downside protection even if cyclical demand weakens.
However, the quarter was overshadowed by a significant cost headwind, as Delta guided Q2 fuel expenses to approximately $4.30 per gallon versus $2.62 in Q1, implying a multi-billion-dollar sequential increase driven by elevated global oil prices and geopolitical disruptions in Middle Eastern supply routes, creating more than a $2 billion incremental cost burden. In response, management signaled it will “meaningfully” reduce capacity growth plans, reflecting a more cautious stance on supply expansion despite strong demand trends.
Despite this sharp rise in input costs, investor sentiment remained positive, with the stock rising nearly 12%, as markets focused on Delta’s premium-led revenue durability, strong cash generation profile, and the structural earnings power of its loyalty ecosystem, which together continue to offset near-term fuel volatility and support a resilient long-term earnings narrative.
Previously, we covered a bullish thesis on Delta Air Lines, Inc. (DAL) by jaunty_quant in October 2024, which highlighted the undervaluation, technical indicators, fuel cost headwinds, and post-CrowdStrike recovery setup. DAL’s stock price has appreciated by approximately 38.25% since our coverage. LongYield shares a similar view but emphasizes on record earnings strength, premium revenue mix expansion, and loyalty-driven cash flow durability rather than technical undervaluation signals.
Delta Air Lines, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held DAL at the end of the fourth quarter which was 70 in the previous quarter. While we acknowledge the risk and potential of DAL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DAL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
