Delta Air Lines is in the 'best fundamental shape it has ever been in'

Delta Air Lines Inc (NYSE: DAL) is not seeing any signs of a slowdown in travel demand.

A resilient economy, it expects, will deliver a mid-single-digit percentage points increase in revenue next year – roughly in line with a 6.0% growth that analysts had forecast.

DAL will increase its flying capacity by up to 4.0% in 2025 and is committed to growing its adjusted earnings by 10% (annually) over the next three to five years, as per its Investor Day presentation on Wednesday.

Delta stock is up a whopping 60% year-to-date at writing.

Delta stock has pushed through a key overhead resistance

Delta Air Lines particularly touted solid demand for its higher-end offerings that played a central role in making it the most profitable US airline in its Investor Day presentation today.

More than half of the revenue it has generated this year came from premium seats, the air carrier added.

That’s part of the reason why Josh Brown (Ritholtz CEO) expects DAL to extend its gains well into 2025.

Delta is in the “best fundamental shape it has ever been in – billions in free cash flow, huge growth, and just absolutely firing on all cylinders,” he told CNBC in a recent interview.

Note that Delta stock has broken above a key multi-year overhead resistance around the $60 level.

That also suggests it’s well-positioned for further gains ahead.

DAL is significantly ahead of its competitors

Delta Air Lines has a long-standing partnership with American Express that makes up for another good reason to remain invested in this stock, as per Sarat Sethi of DCLA.

He dubs DAL his favorite stock as its management is fully committed to eliminating all debt over the next two years.

Sethi expects the flagship carrier to benefit now that the JetBlue and Spirit Airlines merger has collapsed.

“They’re so far above all of them [competitors] … the earnings growth and the free cash flow is why you want to be in this company,” he argued in a recent interview.

Delta stock pays a dividend yield of 0.93% as well which makes it even more attractive for income investors.

Delta Air Lines may be headed for $90 a share

All in all, Delta Air Lines looks poised for further gains as it continues to expand its market share in the years ahead.

Analysts at Barclays currently see an upside in DAL to $90 which indicates potential for another 40% rally from here.

The investment firm expects moats will “grow deeper for the winners” in the airline industry in 2025. He expects Delta stock to extend its gains also on sharply positive fundamentals and bullish investor sentiment.

Barclays remains constructive on the flagship air carrier even though it came in below Street estimates in its latest reported quarter.