Core Viewpoint - Delta Airlines is positioned as the best investment among the three largest U.S. airlines, having reported strong Q3 results and becoming the largest domestic airline by revenue and profitability, surpassing United and American Airlines [1][3]. Delta's Strong Q3 Results - Delta reported Q3 sales of $16.67 billion, a 6% increase from $15.67 billion in the same quarter last year, exceeding estimates of $15.79 billion [3]. - The net income for Q3 was $1.5 billion, or $1.71 per share, marking a 14% increase from the previous year's EPS of $1.50 and surpassing expectations of $1.52 [3]. Growth Drivers - Premium revenue increased by 9%, indicating strong demand for higher-cabin classes [4]. - Corporate sales rose 8% year-over-year, reflecting a recovery in business travel [4]. - Delta's SkyMiles loyalty program revenue grew by 9% [4]. - Co-branded credit card spending saw double-digit growth, contributing to $2 billion in earnings from the partnership with American Express, a 12% increase from the previous year [5]. - Operating margins improved to 11.2% from 9.4% in Q3 2024 [5]. Optimistic Guidance - Delta anticipates Q4 revenue growth of 2%-4%, above the Zacks Consensus estimate of $15.33 billion [6]. - Projected Q4 EPS is between $1.60-$1.90, exceeding expectations of $1.59 [6]. - Full-year EPS is expected to be near the top end of the prior range of $5.25-$6.25, with current estimates at $5.67 [6]. - Free cash flow targets for the full year are reaffirmed at $3.5-$4 billion, with a margin outlook of 10.5%-12% [7]. Performance & Valuation Comparison - Year-to-date, Delta's stock is down approximately 1%, while United's is up 4% and American Airlines is down 33% [8]. - Over the last three years, Delta's stock has gained 100%, outperforming most peers, while American Airlines is down 3% and United has seen nearly 200% growth [9]. - Delta's stock is valued at around $60 per share with a forward P/E of 9X, comparable to the industry average and United's valuation, while American Airlines trades at a higher forward P/E of 33X [10]. Conclusion & Final Thoughts - The post-earnings rally in Delta's stock appears justified, with a Zacks Rank of 3 (Hold) alongside United and American Airlines [12]. - Delta's diverse revenue streams and better-than-expected guidance may lead to upward revisions in earnings estimates, potentially attracting a buy rating [13].