Delta covered a $6 billion fuel bill with fares, but $82 needs $6.83 next year at 12 times. I cut 2027 profit to $6.70 for an $80.40 target, a hold.
Key points
- $1.72 profit per share in Q3 missed the $2.00 to $2.50 July guide on fuel $500 million high.
- $4.25 per gallon Q4 fuel guide with $0.40 refinery help keeps pressure on the $5.35 2026 midpoint.
- $6.70 profit per share in 2027 at 12 times profit gives $80.40, near the $81.99 price.
The call
At $81.99 the stock costs 15.3 times the $5.35 2026 midpoint. At a normal 12 times it requires $6.83 in 2027, up 28 percent. That needs fuel near $3.50 plus steady fares.
Quarterly revenue shows fares covering fuel- Reported revenue
- My forecast
SEC XBRL revenue to Sep 2026; E are author forecasts. Oct 9 2026.
I now see a smaller rebound than before. Q3 unit revenue rose 15.4 percent on flat flying with premium up near 20 percent. But Q3 nonfuel unit cost rose 7.3 percent and Gulf fuel sits near $4.40, so $8.48 is out of reach.
Valuation
| Step | Figure |
|---|
| 2026 profit base | $5.35 a share in 2026 |
| Fuel relief to $3.50 on 4.3B gallons | +$0.77 a share in 2027 |
| Growth plus cost healing | +$0.58 a share in 2027 |
| 2027 profit estimate | $6.70 a share in 2027 |
| At 12 times profit | $80.40 target by Oct 2027 |
Twelve times pays for loyalty and premium mix but respects fuel swings. Profit means yearly profit per share. Downside to $49 at $4 fuel offsets upside to $111 at $3 fuel, so this is a hold.
Target hinges on fuel holding near 3.50 dollarsAuthor math on 4.3B gallons; Oct 9 2026 fuel curve.
Risks
- Fuel holds near $4.00 and my relief fades, seen in Gulf Coast jet spots staying above $4.00.
- Rivals add seats and fares slip as fuel eases, seen in flat or falling unit revenue on higher capacity.
- Unit cost stays above 5 percent, seen in quarterly cost guides missing low single digit growth.
What would change my mind
Fuel below $3.25 per gallon with unit revenue still up would lift 2027 profit past $7.50 and force a buy.