Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 9.7 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 9.1 |
| PEG | 9.3 |
| Analyst target | 3.0 |
- ▸Forward P/E: 11.4x
- ▸PEG: 0.62
- ▸Attractively valued
DAL · Why this verdict
Why Delta Air Lines (DAL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality scores at the minimum acceptable threshold — at the floor of what is considered investable — with free cash flow conversion flagged at 69% of net income, a modest but real concern about earnings quality that limits the stock's margin of safety. Quality | FCF conversion rises above 80% of net income and the quality score improves above 4.5 over the next four quarters, removing the threshold-floor concern. | →Stable |
| CounterFree cash flow at 69% of net income still means the business generates meaningful cash; the gap between reported earnings and cash may reflect capital allocation decisions rather than a structural quality problem. | ||
Three of the last four quarters produced positive earnings surprises averaging roughly 6%, with the most recent April 2026 report delivering an 11% beat — a pattern of consistently out-delivering expectations that has held through different demand environments. Earnings | EPS beat rate holds at or above 75% over the next four quarters with average positive surprise above 5%. | →Stable |
| CounterOne in-line result in January 2026 interrupts the streak, and with next earnings just 23 days out, implied volatility signals that the options market sees meaningful binary risk in the upcoming print. | ||
A forward P/E of 10.4 times and a PEG ratio of 0.59 suggest the stock is priced for subdued expectations relative to the earnings growth rate — creating optionality if the current beat cadence continues. Value | Forward earnings estimates are revised upward, keeping the PEG below 0.75 while the multiple expands modestly toward 12 times over the next 12 months. | →Stable |
| CounterAirlines historically trade at compressed multiples because earnings are cyclical and capital-intensive; the low forward P/E may accurately reflect long-run earnings uncertainty rather than a market mispricing. | ||
A golden cross is in place, the stock trades above all key moving averages, OBV is rising on volume accumulation, and the momentum score of 7.7 out of 10 suggests institutional buying interest has been present in recent months. Momentum | Price holds above the 200-day moving average and OBV continues rising over the next six months. | →Stable |
| CounterMomentum is a lagging signal; with less than 2% upside remaining to the near-term target, the constructive technical backdrop may reflect strength that has already been largely realized. | ||
The stock sits just 1.9% below its near-term resistance target with a risk/reward ratio of 0.27-to-1 — meaning the defined downside scenario is roughly 3.5 times the available upside — a profile that disfavors new exposure. Price targets | If this pillar is wrong, the stock breaks decisively above resistance following a strong earnings catalyst, resetting the price target materially higher and restoring a favorable entry geometry. | →Stable |
| CounterThe unfavorable geometry is a point-in-time snapshot; earnings in 23 days represent a catalyst that could shift the target higher, immediately improving the setup for those who hold through. | ||
Business quality scores at the minimum acceptable threshold — at the floor of what is considered investable — with free cash flow conversion flagged at 69% of net income, a modest but real concern about earnings quality that limits the stock's margin of safety.
→StableQuality
- Expectation
- FCF conversion rises above 80% of net income and the quality score improves above 4.5 over the next four quarters, removing the threshold-floor concern.
CounterFree cash flow at 69% of net income still means the business generates meaningful cash; the gap between reported earnings and cash may reflect capital allocation decisions rather than a structural quality problem.
Three of the last four quarters produced positive earnings surprises averaging roughly 6%, with the most recent April 2026 report delivering an 11% beat — a pattern of consistently out-delivering expectations that has held through different demand environments.
→StableEarnings
- Expectation
- EPS beat rate holds at or above 75% over the next four quarters with average positive surprise above 5%.
CounterOne in-line result in January 2026 interrupts the streak, and with next earnings just 23 days out, implied volatility signals that the options market sees meaningful binary risk in the upcoming print.
A forward P/E of 10.4 times and a PEG ratio of 0.59 suggest the stock is priced for subdued expectations relative to the earnings growth rate — creating optionality if the current beat cadence continues.
→StableValue
- Expectation
- Forward earnings estimates are revised upward, keeping the PEG below 0.75 while the multiple expands modestly toward 12 times over the next 12 months.
CounterAirlines historically trade at compressed multiples because earnings are cyclical and capital-intensive; the low forward P/E may accurately reflect long-run earnings uncertainty rather than a market mispricing.
A golden cross is in place, the stock trades above all key moving averages, OBV is rising on volume accumulation, and the momentum score of 7.7 out of 10 suggests institutional buying interest has been present in recent months.
→StableMomentum
- Expectation
- Price holds above the 200-day moving average and OBV continues rising over the next six months.
CounterMomentum is a lagging signal; with less than 2% upside remaining to the near-term target, the constructive technical backdrop may reflect strength that has already been largely realized.
The stock sits just 1.9% below its near-term resistance target with a risk/reward ratio of 0.27-to-1 — meaning the defined downside scenario is roughly 3.5 times the available upside — a profile that disfavors new exposure.
→StablePrice targets
- Expectation
- If this pillar is wrong, the stock breaks decisively above resistance following a strong earnings catalyst, resetting the price target materially higher and restoring a favorable entry geometry.
CounterThe unfavorable geometry is a point-in-time snapshot; earnings in 23 days represent a catalyst that could shift the target higher, immediately improving the setup for those who hold through.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The airline trades at a forward multiple of 10.4 times with a PEG below 1 and broadly constructive technical indicators, but the stock sits just 1.9% below its near-term resistance target with a risk/reward of 0.27-to-1 — a geometry that does not support initiating or adding to a position at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.3 |
| ROA | 2.9 |
| Gross margin | 0.0 |
| Op margin | 1.3 |
| Net margin | 3.4 |
| Current ratio | 1.7 |
| FCF quality | 5.3 |
| Moat | 6.0 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 69% FCF/NI
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.7 |
| EPS growth | 5.7 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.7 |
- ▸Overbought (RSI 83)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 9.0 |
| Price target | 4.9 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $11,238,177 (0.018% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 6.2 |
| growth rank | 6.3 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.5 |
| 52w position | 9.4 |
| gap | 5.0 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 7.6 |
| volatility | 5.0 |
| put call | 8.7 |
| implied vol | 2.6 |
| beta | 5.8 |
| debt equity | 4.9 |
- ▸High IV: 65%
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 6 days
- ▸Dividend: 84.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.7=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
-0.71
Upside
-10.6%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.5 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.7=NEGATIVE.
The strongest dimensions are Value at 7.5, Momentum at 6.9, and Sentiment at 6.5; the weakest are Quality at 4.0, Technical at 4.5, and Insider at 5.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.71 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Pattern
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Attractive Earnings Multiple
Trip ifForward P/E expands above 14x without a corresponding upward revision to forward EPS estimates.
- P3Constructive Momentum Setup
Trip ifPrice falls below the 200-day moving average for more than 10 consecutive trading sessions.
- P4Unfavorable Risk Reward At Target
Trip ifUpside to a revised take-profit target expands beyond 15% following a post-earnings price target reset.
- P5Quality At Minimum Threshold
Trip ifFCF as a proportion of net income rises above 85% for 2 consecutive reporting quarters.