How Should Investors Approach DAL Stock as Government Shutdown Ends?

Core Insights - The longest federal government shutdown in U.S. history ended after 43 days, causing significant disruptions for federal workers and travelers [1] - Airlines, particularly Delta Air Lines (DAL), faced challenges due to staffing shortages and reduced flight capacity during the shutdown [2][3] Company Performance - DAL's stock has shown impressive performance over the past six months, gaining in double digits and outperforming the Zacks Transportation - Airline industry and American Airlines (AAL) [4] - Delta's third-quarter earnings rose 14% year over year, reaching $1.71 per share, which beat the Zacks Consensus Estimate of $1.52 [10] - Revenues for the September quarter were $16.67 billion, exceeding estimates and increasing 6.4% year over year [10] Revenue Growth - Delta's diversified revenue base grew in double digits year over year, with premium revenues and loyalty revenues each increasing by 9% [11] - Adjusted operating revenues increased 4.1% year over year to $15.2 billion, driven by improving air travel demand [10] Financial Returns - DAL announced a 25% increase in its quarterly dividend payout, marking the second increase since resuming dividends post-COVID [13] - The new quarterly dividend is set at 18.75 cents per share, annualized at 75 cents [14] Cost Management - Lower fuel costs positively impacted DAL's bottom line, with average fuel prices per gallon declining 11% year over year to $2.25 [15] - However, labor costs increased by 7% year over year in the first nine months of 2025, contributing to rising non-fuel unit costs [19] Valuation - DAL is currently trading at a forward price-to-sales (P/S) ratio of 0.61X, which is lower than the industry average [16] - DAL holds a Value Score of A, comparable to American Airlines and United Airlines [16] Market Outlook - The end of the government shutdown is expected to improve flight operations and passenger volumes for DAL as the holiday season approaches [3][7] - Despite the positive outlook, high labor costs and potential flight cancellations remain concerns for DAL's future performance [20]