DAL
Delta Air Lines, Inc.
$86.70
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 10.4% below fair value
You pay
$86.70
Bear
$67.68
Fair
$96.75
Bull
$124.60
Bear
$67.68
-21.9%
5% stage 1 growth, 11% discount
Fair
$96.75
+11.6%
9% stage 1 growth, 11% discount
Bull
$124.60
+43.7%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
19.2x
Market is pricing in (growth)
8.4%
vs 9.1% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $107.75 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $96.75 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions