Analyst Note
| Burkett Huey, CFA |No-moat-rated Delta posted a bifurcated first quarter with the COVID-19 omicron surge depressing demand in January and the first half of February—but demand has since surged from President’s Day onward, and management has had success in passing fuel and wage inflation to the consumer. Sales of $9.3 billion and loss per share of $1.23 beat FactSet consensus by 6.5% and 2.4%, respectively. We reduce our fair value estimate to $55 per share as we account for higher near-term fuel prices and increase our medium-term wage assumptions, which reduced our midcycle operating margin estimate by 20 basis points to 15.6%.