Delta Air Lines shares have soared nearly 50% over the past 12 months, far exceeding the S&P 500's total return of around 18%. The rally was driven by improved operational results rather than speculative trading, with the carrier absorbing a $1.65 billion year-over-year increase in aircraft fuel costs while reporting only a $238 million decline in operating income. Management reiterated full-year earnings guidance of $6.50 to $7.50 per share, supported by a premiumization strategy that now generates more revenue from first-class sales and upgrades than from main cabin tickets. If earnings hit the high end of forecasts and the stock rerates to 15 times forward earnings, shares could reach approximately $112.50, representing over 37% upside from current levels.
Delta Air Lines IncImproved operational results, reiterated earnings guidance, and potential rerating to 15x forward earnings suggest upside.
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