Core Insights - The Q4 earnings season began positively with JPMorgan and Delta Air Lines reporting favorable results, although both stocks fell over 2% due to cautious economic outlooks [1][2] JPMorgan's Q4 Results - JPMorgan reported Q4 sales of $45.79 billion, a 7% increase from $42.76 billion in the previous year, surpassing expectations of $45.69 billion [4] - The bank's net income was $13 billion, with adjusted EPS of $5.23, exceeding Q4 earnings expectations of $4.87 per share by 7% and rising 9% from $4.81 a year ago [6] - A 17% increase in market revenue, driven by fixed income, currencies, commodities, and equities, was a key growth factor, while investment banking continued to struggle [4][6] - JPMorgan's full-year sales increased 3% to $185.6 billion, with full-year EPS rising 1% to $20.02 [10] Delta Air Lines' Q4 Results - Delta's Q4 sales rose 3% to $16 billion, exceeding estimates of $15.62 billion, despite a 2% revenue reduction due to the U.S. government shutdown [8] - The airline reported a net income of $1.22 billion, with adjusted EPS of $1.55, slightly above estimates of $1.53 but down from $1.85 in the previous year [9] - Delta's full-year sales reached a record $63.4 billion, with management highlighting strong free cash flow generation of $4.6 billion [11] Economic Insights - JPMorgan's CEO noted the resilience of the U.S. economy but warned of geopolitical tensions and potential inflation challenges [2] - Delta indicated a bifurcation in consumer spending, with high-income travelers maintaining strong spending while price-sensitive consumers show signs of fatigue [3] Future Guidance - JPMorgan expects FY26 net interest income to rise to $103 billion, with projected sales of $190.86 billion and EPS of $20.97 [10] - Delta anticipates FY26 EPS between $6.50 and $7.50, indicating over 20% growth, with Q1 EPS expected at $0.50-$0.90 [12] Valuation and Investment Considerations - Both JPMorgan and Delta are considered attractively valued, with JPM trading at 15X forward earnings and Delta at 9X [13] - Analysts may find it appealing to buy into these stocks post-earnings selloff, provided economic outlooks and EPS revisions remain stable [14]

Market Overview - U.S. stocks ended lower, primarily driven by declines in financial shares due to concerns over President Trump's credit-card proposal [10] - The Dow Jones Industrial Average fell by 398.21 points (0.80%) to 49,191.99, while the S&P 500 lost 13.53 points (0.19%) to 6,963.74 [10] - The Nasdaq Composite decreased by 24.03 points (0.10%) to 23,709.87 [10] Financial Sector Performance - Shares of Visa fell by 4.5%, Mastercard dropped by 3.8%, and the financial sector overall declined by 1.8%, leading the S&P 500's losses [10] - JPMorgan's shares ended down by 4.2%, despite reporting a better-than-expected quarterly profit, attributed to a drop in investment banking fees [10][5] - Other major banks also experienced declines ahead of their quarterly earnings reports, although analysts expect stronger results for the last quarter of 2025 [5] Economic Indicators - A report on U.S. inflation for December met expectations, which helped to stabilize market expectations for potential interest rate cuts from the Federal Reserve this year [10] - Tim Ghriskey, a senior portfolio strategist, noted that financials are being negatively impacted by Trump's credit-card proposal, which could hurt profits for financial companies [2] Earnings Season Insights - The fourth-quarter U.S. earnings season unofficially began with results from JPMorgan and other companies, with expectations of positive earnings news overall [6] - Oliver Pursche, a senior vice president at Wealthspire Advisors, indicated that there may be upward revisions for 2026 earnings forecasts [6] Market Dynamics - Advancing issues outnumbered decliners on the NYSE by a ratio of 1.15-to-1, with 577 new highs and 77 new lows [11] - On the Nasdaq, 2,068 stocks rose while 2,701 fell, resulting in a declining issues ratio of 1.31-to-1 [11] - Trading volume on U.S. exchanges reached 18.68 billion shares, surpassing the 20-day average of approximately 16.4 billion shares [11]

Core Insights - The earnings season is currently active, with many prominent companies in the market releasing their latest financial reports and outlooks for 2026 [1] Group 1 - Advisors and investors are closely monitoring the performance and forecasts of these companies during this earnings season [1]

Core Viewpoint - Delta Air Lines reported mixed fourth-quarter results, exceeding profit expectations but missing revenue forecasts, leading to a decline in share price by approximately 3% intraday Financial Performance - Adjusted earnings for the December quarter were $1.55 per share, slightly above the consensus estimate of $1.52 [2] - Total revenue for the quarter was $14.61 billion, falling short of analysts' expectations of $14.72 billion [2] - Revenue growth was impacted by approximately two percentage points due to the government shutdown, which primarily affected domestic travel demand [2] - Quarterly revenue increased by 1.2% year over year, supported by a capacity growth of 1.3% [3] - For the full year 2025, Delta achieved record revenue of $58.3 billion, a 2.3% increase from 2024 [3] - Revenue from diversified streams, including premium services, cargo, and maintenance operations, rose by 7% year over year, accounting for 60% of total revenue [3] Future Guidance - Delta forecasts first-quarter 2026 revenue growth of 5% to 7% year over year, with operating margins expected between 4.5% and 6% [4] - Projected first-quarter earnings per share are estimated to be between $0.50 and $0.90, compared to consensus expectations of $0.72 [4] - For the full year 2026, Delta anticipates earnings of $6.50 to $7.50 per share, indicating approximately 20% growth at the midpoint from 2025 levels, but below the Street consensus of $7.32 [4] Strategic Developments - Delta announced a new agreement with Boeing to purchase 30 Boeing 787-10 widebody aircraft, with options for an additional 30 planes, with deliveries scheduled to begin in 2031 [5]

Core Insights - Basic airfares are expected to rise as airlines adjust to maintain profitability, particularly in the main cabin segment [2][8] - Delta's fourth-quarter earnings were slightly below analysts' expectations, with a more conservative profit forecast than anticipated [3] - The airline industry is experiencing a shift in demand, with premium ticket sales increasing while low-cost seat sales are sluggish [6] Industry Trends - Airlines, including Delta, are losing money on transporting passengers and are focusing on ancillary services for profit [2] - Delta reported that revenue from premium tickets reached $5.7 billion in the fourth quarter, surpassing the $5.6 billion from basic tickets [6][8] - Capacity reductions and consolidation among airlines are likely to continue, impacting flight availability and pricing [4][7][8] Consumer Impact - Reduced main cabin capacity may lead to fewer flight options and changes in operational schedules [4] - The increase in premium ticket sales indicates that wealthier consumers are less affected by economic pressures, influencing overall travel demand [5][6]

Core Insights - Delta Air Lines is strategically entering the long-haul market by ordering up to 60 Boeing 787-10 planes, aiming to attract premium travelers and compete with rivals like American and United [1][2] - The new 787 aircraft will feature Delta's Delta One business class, premium economy, and standard coach, enhancing its offerings in the competitive transatlantic market [2] - Delta's President highlighted the 787's financial advantages, including improved cargo capacity and fuel efficiency, while the airline plans to grow capacity by 3% this year, focusing on premium cabins [3] Fleet Strategy - This order marks Delta's first direct purchase of the Boeing 787, indicating a shift in its long-haul fleet strategy, as it previously favored Airbus [4][5] - The 787-10 variant ordered can seat up to 336 passengers and has a range of approximately 7,300 miles, making it a suitable replacement for Delta's aging 767s [6] - The addition of the 787-10 diversifies Delta's fleet, which has been predominantly Airbus, and is expected to enhance operational efficiency on long-haul routes [5][6] Market Context - Delta's 767s primarily serve routes to Europe and South America, where the 787 is seen as an ideal addition, reflecting confidence in Boeing amid its recent challenges [7] - The announcement of the 787 order coincides with Delta's strong financial performance, reporting a net income of about $5 billion for 2025, driven by robust demand in premium and corporate travel [8][9] - Despite a 7% year-over-year decline in main-cabin ticket revenue, Delta's stock has gained approximately 6% over the past year, indicating resilience in its market position [9]

Core Viewpoint - The article emphasizes the importance of identifying undervalued stocks that are mispriced by the market as a strategy for investment in 2026 [1]. Group 1: Company Overview - Stone Fox Capital is an RIA based in Oklahoma, led by Mark Holder, a CPA with 30 years of investing experience, including 15 years as a portfolio manager [2]. - The investing group "Out Fox The Street" provides stock picks and in-depth research aimed at uncovering potential multibaggers while managing portfolio risk through diversification [2]. Group 2: Features and Services - The group offers various model portfolios, stock picks with identifiable catalysts, daily updates, real-time alerts, and access to community chat and direct communication with Mark for inquiries [2].

Core Insights - Delta Air Lines has achieved record revenue and free cash flow, driven by a premium customer base and sophisticated merchandising strategies [1][3][6] - The airline's premium revenue grew by 7% in 2025, contributing to 60% of total revenue, indicating a shift towards higher-margin services [1][3] - Delta's earnings per share guidance for 2026 is between $6.50 to $7.50, reflecting strong financial performance despite previous guidance being higher [4][5] Financial Performance - In the December quarter, Delta generated $14.6 billion in revenue with a 10% operating margin and earnings of $1.55 per share, slightly above expectations [2] - Full-year revenue for 2025 reached $58.3 billion, a 2.3% increase year-over-year, with a 10% operating margin and $5 billion in pre-tax income [3] - Free cash flow for 2025 was $4.6 billion, the highest in Delta's history, significantly improving its balance sheet [3] Market Position and Strategy - Delta's focus on premium, high-income travelers has insulated it from challenges faced by lower-cost airlines, which are struggling in the current economic climate [5][9] - The partnership with American Express has been pivotal, with co-brand remuneration increasing by 11% to $8.2 billion, and expectations for continued growth [7] - Delta anticipates further consolidation in the airline industry, particularly among carriers that are not meeting their cost of capital [10] Industry Dynamics - The airline industry is experiencing a divide between premium carriers and budget airlines, with the latter facing significant challenges [8][9] - Delta's Main Cabin customers remain a weak spot, with revenue trends not yet reflecting a recovery in this segment [10] - The airline's merchandising initiatives are expected to create multibillion-dollar opportunities, enhancing revenue from existing travelers [11]

Core Insights - Delta Air Lines reported earnings per share (EPS) of $1.55, exceeding the estimated $1.53, while revenue of $14.61 billion fell short of the expected $15.69 billion [1][6] - CEO Ed Bastian expressed optimism for a 50% increase in EPS for the first quarter of 2026, driven by strong travel demand [2] - Delta has placed an order for thirty Boeing 787-10 aircraft, indicating a strategic move to expand its fleet and meet increasing demand for premium travel services [3] Financial Metrics - The company has a price-to-earnings (P/E) ratio of approximately 9.94, and a price-to-sales ratio of about 0.74, indicating the market's valuation of its earnings and sales [4] - Delta's earnings yield stands at about 10.06%, while the debt-to-equity ratio is approximately 1.15, reflecting the company's financial leverage [5] - The current ratio is around 0.40, suggesting a need for improvement in managing short-term liabilities [5]

Core Insights - Delta Air Lines (DAL) reported fourth-quarter 2025 earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.53, but reflecting a 16.22% year-over-year decline due to high labor costs [1] - Revenues for the quarter reached $16 billion, surpassing the Zacks Consensus Estimate of $15.63 billion, and showing a 2.9% increase year-over-year [2] Financial Performance - Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year-over-year to $14.6 billion, impacted by approximately 2 points due to the government shutdown [2] - Passenger revenues, which constituted 80.7% of total revenues, rose 1% year-over-year to $12.91 billion, with domestic passenger revenues remaining flat due to the government shutdown [5] - Cargo revenues decreased by 1% year-over-year to $246 million, while other revenues increased by 14% to $2.84 billion [6] - Adjusted operating margin was 10.1% in Q4 2025, down from 12% a year ago [6] Operational Metrics - Revenue passenger miles decreased by 1% to 59.86 billion, while capacity expanded by 1.3% to 72.9 billion [7] - Load factor decreased by 200 basis points to 82%, slightly below the estimate of 84% [7] - Total operating expenses rose by 5% to $14.5 billion, with salaries and related costs increasing by 11% to $4.6 billion due to higher wages from a new pilot contract [8] Fleet and Growth Strategy - Delta has agreed to acquire 30 Boeing 787-10 widebody aircraft, with options for an additional 30, expected to enhance fuel efficiency and long-haul capabilities [3][4] - The order is part of Delta's international growth strategy, aimed at strengthening its global footprint [4] Cash Flow and Debt - At the end of Q4 2025, Delta had cash and cash equivalents of $4.3 billion, up from $3.07 billion at the end of Q4 2024 [9] - Adjusted net debt decreased by $3.7 billion to $14.3 billion [9] - Adjusted operating cash flow for the December quarter was $2.2 billion, with free cash flow of $1.8 billion [10] Future Guidance - For Q1 2026, Delta expects adjusted earnings per share in the range of $0.50 to $0.90, with an adjusted operating margin of 4.5% to 6% [11] - Full-year earnings guidance for 2026 is projected between $6.5 and $7.5 per share, indicating a 20% year-over-year growth [12]