Investment Bank Research Brief
Bernstein pointed out that Delta Air Lines (DAL.US) adjusted diluted EPS in 2Q26 was US$1.56, exceeding the upper limit of the company's own guidance and market expectations.
Bernstein pointed out that Delta Air Lines (DAL.US) adjusted diluted EPS in 2Q26 was US$1.56, exceeding the upper limit of the company's own guidance and market expectations. More importantly, the company reiterated its FY26 EPS guidance ($6.5-$7.5), noting that the booking curve is stronger than expected and the pricing outlook is better than previously judged. Based on this, Bernstein raised FY26 adjusted EPS by 18%, and expected an average increase of approximately 9% in subsequent years. The report believes that even if fuel prices fall, high fares may be maintained due to industry structural pricing benefits (such as high-end demand, capacity control). This view implies that the aviation industry's profit cycle may not only be a short-term rebound, but an increase in the profit center. One-sentence conclusion: Delta Air Lines' better-than-expected performance and strong booking data prove the return of pricing power in the airline industry, and earnings improvement is sustainable, not a flash in the pan. Good/bad: Good for Delta Air Lines (DAL.US) and the entire U.S. airline industry. After the better-than-expected performance in 2Q26, the stock price may have responded, but based on the upward shift in the profit center brought about by structural changes in the industry, the current valuation still has room for improvement, and it is not fully priced in. Catalysts: 1) Whether the performance guidance for 3Q26 exceeds the new consensus expectations; 2) Financial reports from industry competitors (such as American Airlines and United Airlines) verify the positive industry pricing trend; 3) The trend of fuel prices, although the risk has been reduced, is still worthy of attention.