* Note: Prices are in Million (M) USD.
Description:
Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. It is headquartered in Atlanta, Georgia.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $3,331 M
Debt : $21,280 M
EBITDA : $8,241 M
Net Debt (Debt - Cash): $17,949 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Industrials
Industry: Airlines
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 10.18
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $958 M
Average Revenue: $35,780 M
Revenue Converted To Free Cash Flow (%): 2.7%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $61,643 M
Revenue 4 Years Ago (2020-12-31): $17,095 M
Last 5 Years Average Revenue Growth: 52%
Since Revenue Growth is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $648 M
Share Count 5 Years Ago (2020-12-31): $636 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $6.59
Trailing 12-Month Earnings Per Share (EPS): $5.55
Average Earnings Per Share (EPS): $6.07
Dividend Per Share (DPS): $1
Payout Ratio: 11%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 1, 1 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 16 valid ROE years (max 20).Average ROE: -118.8%
Since Average ROE is non-positive, 0 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $62
52-Week Low: $35
Threshold Price (15% Above 52-Week Low): $40
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $40,339 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 20 points to above Delta Air Lines Inc (DAL) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Growth Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 14 Years Avg P/E (10.95)
× EPS ($6.07) = $66.47.
Last 14 Years Avg PE 10.95, Fair Value PE 15, Industry Based PE 10, Growth Based PE 50, RCFC Based PE 14.14, ROE Based PE 10, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 18.17. Value-Trades has assined P/E value 18.17. Since an average (Current Year EPS + Next Year EPS) earning per share is $6.07.
The fair value of Delta Air Lines Inc (DAL) stock should be (18.17 x $6.07) = $110.28.
