Delta Air Lines, Inc. (DAL) DCF Valuation
TGM's two-stage DCF values Delta Air Lines, Inc. (DAL) between $39.89 and $72.81 depending on assumptions, with a base case of $55.18. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use) (capped at 18%)), fading to 2.5% long-run; the discount rate (10.6%) reflects its beta.
What would today's price require?
$83.06 is justified only if free cash flow grows about +26.8% a year (fading to 2.5% long-run) at a 10.6% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 11.6% | $39.89 |
| Base case | 18.0%/yr | 10.6% | $55.18 |
| Optimistic | 20.0%/yr | 9.6% | $72.81 |
Current Price
$83.06
Market-Implied Growth
+26.8%/yr
vs +38.8% 5Y actual
Model Scenario Range
$39.89 – $72.81
model output — not a price target
DAL DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DAL (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.0B · 0.66B shares · net debt $10.6B
Estimated Fair Value
$102.46
+23.4% vs $83.06
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $83.06; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.6% | $134 | $142 | $152 | $163 | $176 |
| 9.6% | $111 | $117 | $123 | $131 | $140 |
| 10.6% | $93.67 | $97.81 | $102 | $108 | $114 |
| 11.6% | $79.80 | $82.88 | $86.30 | $90.11 | $94.40 |
| 12.6% | $68.61 | $70.95 | $73.53 | $76.37 | $79.52 |
About Delta Air Lines, Inc.
Delta Air Lines, Inc. operates scheduled air transport services for both passengers and freight, serving destinations across the United States and internationally. Its operations are structured into two main segments: its core airline business and a refinery division. Domestically, its network is anchored by primary hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, further supported by coastal gateways such as Boston, Los Angeles, New York (LaGuardia and JFK), and Seattle. Globally, it maintains a significant presence through key international hubs and operational centers in cities like Amsterdam, Mexico City, London-Heathrow, Paris-Charles de Gaulle, and Seoul-Incheon. Tickets are distributed through multiple channels, including its official website (delta.com), the Fly Delta mobile app, direct reservations, online travel agencies, traditional brick-and-mortar agencies, and other distribution partners. Beyond flight services, the company offers aircraft maintenance, engineering support, repair, and overhaul capabilities. It also arranges vacation packages for external clients, along with aircraft charter services, management, and associated programs. The airline operates a vast fleet of roughly 1,200 aircraft. Established in 1924, Delta Air Lines, Inc. is headquartered in Atlanta, Georgia.
- Sector
- Industrials
- Industry
- Airlines, Airports & Air Services
- CEO
- Edward H. Bastian