DCF Studio

    DAL · NYQ · Industrials

    Delta Air Lines, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 70.26

    Market price

    USD 83.42

    Implied upside

    -15.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 9.3% of revenue against depreciation of 4.0%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 70.26-15.8%
    Exit multiple
    USD 80.51-3.5%
    Market price
    USD 83.42

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 75.1bnUSD 77.3bnUSD 79.5bnUSD 81.8bnUSD 84.1bnUSD 86.4bnUSD 88.7bnUSD 91.0bnUSD 93.4bnUSD 95.7bn+2.7%
    EBITUSD 6.7bnUSD 6.9bnUSD 7.1bnUSD 7.3bnUSD 7.5bnUSD 7.7bnUSD 7.9bnUSD 8.1bnUSD 8.3bnUSD 8.5bn+2.7%
    NOPATUSD 5.3bnUSD 5.4bnUSD 5.6bnUSD 5.8bnUSD 5.9bnUSD 6.1bnUSD 6.2bnUSD 6.4bnUSD 6.6bnUSD 6.7bn+2.7%
    Add depreciation & amortisationUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bn+2.7%
    Less capital expenditureUSD -7.0bnUSD -6.8bnUSD -6.7bnUSD -6.5bnUSD -6.3bnUSD -6.1bnUSD -5.9bnUSD -5.7bnUSD -5.4bnUSD -5.1bn-3.4%
    Capex, % of revenue9.3%8.9%8.4%8.0%7.5%7.1%6.7%6.2%5.8%5.3%-
    Less increase in working capitalUSD 58.7mUSD 11.2mUSD 11.3mUSD 11.4mUSD 11.5mUSD 11.5mUSD 11.6mUSD 11.7mUSD 11.7mUSD 11.7m+16.4%
    Free cashflow to firmUSD 1.4bnUSD 1.7bnUSD 2.1bnUSD 2.5bnUSD 3.0bnUSD 3.5bnUSD 3.9bnUSD 4.4bnUSD 5.0bnUSD 5.5bn+16.5%
    Discount factor0.95930.88280.81250.74770.68810.63320.58280.53630.49360.4542-
    Present valueUSD 1.3bnUSD 1.5bnUSD 1.7bnUSD 1.9bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.5bn-
    Present Value Of The ForecastUSD 20.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.282Reported 1.421, pulled toward 1.0 (Blume)
    Cost of equity10.32%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 8.6x interest cover. Book interest / average debt was lower, at 3.2%.
    Market capitalisationUSD 54.9bn73.0% of capital
    Total debtUSD 20.3bn27.0% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.66%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 70.26

    67% of EV

    Forecast FCFF, final year
    USD 5.5bn
    Capex at depreciation, working capital in reinvestment
    USD 6.7bn
    Less reinvestment at g/ROIC (18.4% of NOPAT)
    USD -1.2bn
    Capitalised
    USD 5.5bn
    ROIC (reported)
    13.6%
    Terminal value, undiscounted
    USD 91.5bn
    Terminal value, discounted
    USD 41.5bn
    Enterprise value
    USD 61.9bn
    Less net debt
    USD 16.0bn
    Equity value
    USD 46.0bn

    Exit at 8.6x EBITDA

    Value per shareUSD 80.51

    70% of EV

    Terminal value, undiscounted
    USD 106.2bn
    Terminal value, discounted
    USD 48.2bn
    Enterprise value
    USD 68.6bn
    Less net debt
    USD 16.0bn
    Equity value
    USD 52.7bn

    Spread between methods: 14%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.66%110.12115.48122.36131.37143.53
    7.66%85.4287.9691.1895.27100.56
    8.66%67.7768.8670.2672.0674.37
    9.66%54.5854.8755.3155.9356.79
    10.66%44.3744.2144.1144.1144.21

    Outlined: this model. Green text: above today's price of 83.42. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year7.8%4.2%5.7%
    EBIT margin9.7%8.9%9.9%
    Discount rate-8.7%8.0%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.