Is Delta Air Lines Stock a Buy?

Core Viewpoint - The investment case for Delta Air Lines has strengthened due to excellent earnings results, making it a strong long-term growth stock option for investors [1] Group 1: Financial Performance - Delta's first-quarter adjusted revenue growth was 6%, with total revenue per available seat mile (TRASM) at 19.17 cents, slightly down from 19.3 cents year-over-year [3] - Non-fuel cost per available seat mile (CASM-Ex) increased by only 1.5% to $14.08, better than the forecasted 3% increase [3] - The overall CASM decreased to 20.04 cents from 21.25 cents in the same quarter last year, contributing to a year-over-year adjusted operating margin increase from 4.5% to 5.1% [3][4] Group 2: Future Guidance - For the second quarter, Delta expects adjusted revenue growth of 5%-7% driven by capacity growth of 6%-7% and a CASM-Ex increase of 2% [4] - Management maintained its full-year guidance, indicating confidence in the summer travel season's performance [4] Group 3: Revenue Composition - Delta is focusing on premium travelers, with premium ticket sales increasing by 10% to$ 4.41 billion, while loyalty travel awards revenue grew by 14% to $0.84 billion [6][5] - Total loyalty revenue increased by 12%, with American Express remuneration expected to grow from$ 6.8 billion in 2023 to $10 billion over the long term [5] Group 4: Debt Management - Delta repaid$ 700 million in debt during the quarter, with a plan to repay $4 billion in 2024, which is expected to improve its debt-to-earnings multiples [7] - The stock is trading at 7.3 times 2024 Wall Street earnings expectations and less than 9 times 2024 free-cash-flow expectations, indicating strong value [7]