3 Reasons to Sell DAL and 1 Stock to Buy Instead

Delta trades at $58.90 per share and has stayed right on track with the overall market, gaining 20.5% over the last six months. At the same time, the S&P 500 has returned 15.5%.

Is there a buying opportunity in Delta, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Do We Think Delta Will Underperform?

We're swiping left on Delta for now. Here are three reasons why DAL doesn't excite us and a stock we'd rather own.

1. Weak Growth in Revenue Passenger Miles Points to Soft Demand

Revenue growth can be broken down into changes in price and volume (for companies like Delta, our preferred volume metric is revenue passenger miles). While both are important, the latter is the most critical to analyze because prices have a ceiling.

Delta’s revenue passenger miles came in at 66.42 billion in the latest quarter, and over the last two years, averaged 7.5% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability.

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Delta’s revenue to rise by 2.3%, a deceleration versus its 12.7% annualized growth for the past five years. This projection is underwhelming and indicates its products and services will face some demand challenges.

3. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Delta historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 5.7%, somewhat low compared to the best consumer discretionary companies that consistently pump out 25%+.

Final Judgment

We see the value of companies helping consumers, but in the case of Delta, we’re out. That said, the stock currently trades at 9.9× forward P/E (or $58.90 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. Let us point you toward a fast-growing restaurant franchise with an A+ ranch dressing sauce.

Stocks We Like More Than Delta

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

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