As of June 15, 2025, Delta Air Lines Inc's estimated intrinsic value ranges from $51.45 to $101.20 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $101.20 | +115.1% |
| Discounted Cash Flow (5Y) | $76.11 | +61.8% |
| Dividend Discount Model (Multi-Stage) | $52.16 | +10.9% |
| Dividend Discount Model (Stable) | $51.45 | +9.4% |
| Earnings Power Value | $82.82 | +76.1% |
Is Delta Air Lines Inc (DAL) undervalued or overvalued?
With the current market price at $47.04, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Delta Air Lines Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.01 | 1.09 |
| Cost of equity | 8.5% | 10.9% |
| Cost of debt | 5.0% | 5.1% |
| Tax rate | 23.7% | 27.3% |
| Debt/Equity ratio | 0.53 | 0.53 |
| After-tax WACC | 6.9% | 8.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $76 | $61,810M | 72.8% |
| 10-Year Growth | $101 | $78,193M | 55.8% |
| 5-Year EBITDA | $93 | $72,736M | 76.8% |
| 10-Year EBITDA | $113 | $85,624M | 59.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $5,023M |
| Discount Rate (WACC) | 8.4% - 6.9% |
| Enterprise Value | $59,497M - $72,890M |
| Net Debt | $12,113M |
| Equity Value | $47,384M - $60,777M |
| Outstanding Shares | 653M |
| Fair Value | $73 - $93 |
| Selected Fair Value | $82.82 |
| Metric | Value |
|---|---|
| Market Capitalization | $30715M |
| Enterprise Value | $42828M |
| Trailing P/E | 8.39 |
| Forward P/E | 8.70 |
| Trailing EV/EBITDA | 5.60 |
| Current Dividend Yield | 115.91% |
| Dividend Growth Rate (5Y) | 5.41% |
| Debt-to-Equity Ratio | 0.53 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $30.36 |
| Discounted Cash Flow (5Y) | 25% | $19.03 |
| Dividend Discount Model (Multi-Stage) | 20% | $10.43 |
| Dividend Discount Model (Stable) | 15% | $7.72 |
| Earnings Power Value | 10% | $8.28 |
| Weighted Average | 100% | $75.82 |
Based on our comprehensive valuation analysis, Delta Air Lines Inc's weighted average intrinsic value is $75.82, which is approximately 61.2% above the current market price of $47.04.
Key investment considerations:
Given these factors, we believe Delta Air Lines Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.