Delta Air LinesNYSE: DAL

Delta Air Lines (DAL) announced on Wednesday that it believes there is a lot of potential for its premium services to expand in the coming years, driven by a strong demand from premium customers.

Delta Air Lines is concentrating on its premium cabins to increase revenue and surpass economy sales. The demand for premium services is mainly coming from millennials who are ready to pay extra for a better experience.

On Wednesday, Delta Air Lines, Inc. DAL's shares remained mostly unchanged as the company held its Investor Day, which aimed to give institutional investors a look at Delta's future plans. Before the event, Delta confirmed its earlier forecasts.

The company provides advice before its investor day.

Delta Air Lines predicts that its revenue will grow by a few percentage points next year, which matches what analysts expect. The airline plans to increase its capacity by a maximum of 4% compared to the previous year in 2025.

Delta Air Lines has now surpassed its trading levels from before the Covid pandemic, recovering from the IT issues in July. In comparison, cruise lines and other transport companies are valued higher, indicating that the airline's growth may just be beginning. Currently, DAL stock is priced below 9 times its expected earnings per share for 2025, making it a good value option.

In the third quarter of 2024, Delta Air Lines earned $15.67 billion in revenue, which is a 1.22% increase from the previous year. Their net income rose by 14.80%, and net margins improved from 7.15% to 8.11%. With a strong focus on the premium market and reduced debt, Delta is well-positioned for growth and may soon return capital to its shareholders.

Delta Air Lines has had its buy rating confirmed, although a smaller short-term price increase is anticipated compared to the 60% rise since my last assessment. The airline is in a favorable situation with ongoing travel demand, no signs of a recession in the near future, and its status as the largest airline in the world. While the stock appears undervalued in some areas, it is currently trading above its moving average and at a five-year peak, which limits its potential for further growth.

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