TLDR
- Delta reports Q2 earnings Friday morning before the open
- Analysts expect EPS of $1.51 on revenue of $17.53 billion, up 13% year over year
- DAL stock has climbed close to 30% over the past three months
- Morgan Stanley’s Ravi Shanker raised his price target to $115, rating Delta Overweight
- The key question is whether airlines can hold on to recent fare increases and capacity discipline
Delta Air Lines hits the tape Friday morning with Q2 results that could set the tone for the entire airline sector heading into the back half of 2026.
Analysts expect adjusted EPS of $1.51 on revenue of $17.53 billion, up 13% year over year. That would land at the top end of Delta’s own guidance range of $1.00 to $1.50 EPS, with a pretax profit of around $1 billion — no small feat given fuel expenses jumped more than $2 billion in the quarter.
DAL stock trades around $89, up roughly 30% over the past three months. The broader JETS ETF has gained 22% in the same window, with United Airlines also up around 30% and American Airlines jumping 45%.
The Iran war drove fuel costs higher for most of the quarter, but airlines offset the pressure through airfare hikes, capacity cuts, and a travel demand environment that simply refused to cool off. Morgan Stanley analyst Ravi Shanker called it “a quarter that threatened to be significantly disruptive” but said it looks to have had “a happy ending with strong revenue trends, jet fuel back down below $3 and solid operating/cost performance.”
Shanker raised his price target on Delta to $115 from $105 on Monday and carries an Overweight rating.
TD Cowen’s Tom Fitzgerald also struck an upbeat tone. “We remain broadly constructive, assuming the industry hangs on to this year’s price increases,” he wrote Thursday. He rates Delta a Buy with a $106 price target.
What Could Move the Stock
A fresh spike in oil prices this week — after President Trump announced the ceasefire with Iran was over — put some near-term pressure on the sector. Ironically, that pullback may give the stock more room to run if Friday’s numbers come in strong.
Beyond the headline figures, investors will be watching what Delta says about demand trends and pricing power heading into Q3. Wall Street is currently modeling Q3 adjusted EPS of $2.03 on revenue of $17.3 billion.
Fuel Costs and Full-Year Guidance in Focus
Delta did not issue full-year 2026 guidance when it reported Q1. The company had previously guided for full-year adjusted EPS of $6.50 to $7.50, a roughly 20% year-over-year jump at the midpoint, with free cash flow of $3 billion to $4 billion.
CEO Ed Bastian said last quarter he wasn’t walking back those targets, but declined to update them. His words at the time captured the quarter’s central tension: “The question of not just the day, of the month, is going to be how we navigate this higher fuel environment brought on by the Iranian conflict.”
Q1 fuel expenses came in at $2.591 billion, up 8% year over year, though that included a refinery benefit of approximately $300 million.
Premium cabin revenue growth has been a consistent buffer for Delta, and investors will want to see whether that trend held through Q2.
Delta is scheduled to report before market open Friday, July 11.
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