Delta Air Lines, Inc. (NYSE:DAL) received a lot of attention from a substantial price increase on the NYSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Delta Air Lines's outlook and valuation to see if the opportunity still exists.
Is Delta Air Lines Still Cheap?
The stock seems fairly valued at the moment according to our valuation model. It's trading around 13% below our intrinsic value, which means if you buy Delta Air Lines today, you'd be paying a reasonable price for it. And if you believe the company's true value is $52.14, then there isn't much room for the share price grow beyond what it's currently trading. Is there another opportunity to buy low in the future? Since Delta Air Lines's share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Delta Air Lines look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 7.2% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Delta Air Lines, at least in the short term.
What This Means For You
Are you a shareholder? DAL's future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you've been keeping tabs on DAL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it's worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Delta Air Lines, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for Delta Air Lines you should know about.
If you are no longer interested in Delta Air Lines, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.