Delta Air Lines and United Airlines have reported second-quarter results that show rising jet fuel costs are pressuring profits, but both carriers maintained or raised their full-year earnings outlooks, keeping their stocks in value territory. Delta affirmed its full-year earnings per share forecast of $6.50 to $7.50, while United lifted its range to $9 to $11 from a previous $7 to $11. Based on those projections, Delta trades at 11.3 to 13 times 2026 earnings and United at 10.6 to 12.9 times, with both companies already baking significantly higher fuel costs into their guidance. The airlines are offsetting expense increases through fare hikes, capacity discipline, and a focus on premium cabins and ancillary revenue. The debate for investors is whether the industry remains a cyclical boom-and-bust business or if Delta and United have structurally diversified their revenue enough to warrant buying at these valuations.
Delta Air Lines IncDelta affirmed its full-year EPS forecast of $6.50-$7.50 and trades at attractive valuations (11.3-13x 2026 earnings), with fuel cost increases already baked into guidance.
United Airlines Holdings IncUnited raised its full-year EPS forecast to $9-$11 from $7-$11 and trades at 10.6-12.9x 2026 earnings, with fuel cost increases already baked into guidance.