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Delta's Double Miss Is a Warning for Airline StocksWritten by Jessica Mitacek. Publication Date: 4/13/2026. 
Key Points
- Despite record quarterly revenue, Delta reported a double miss for Q1 2026, driven in part by a 132% year-over-year spike in jet fuel prices caused by geopolitical instability and the closure of the Strait of Hormuz.
- The airline aims to offset rising costs through fleet modernization and its unique ownership of a fuel refinery.
- Delta has issued cautiously optimistic Q2 guidance, expecting to recover 40% to 50% of the “unprecedented” fuel headwinds while maintaining margins of 6% to 8% in Q2.
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Delta Airlines (NYSE: DAL) reported Q1 2026 earnings on Wednesday, April 8, announcing a double miss. In his earnings call comments, CEO Ed Bastian highlighted the role that “the significant step-up in fuel” played, and acknowledged the airline faces “several external headwinds.”
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Those headwinds include geopolitical tensions tied to Iran and the related closure of the Strait of Hormuz, which have disrupted global supply chains across the fossil fuel industry and helped drive a dramatic uptick in crude oil prices. For aviation specifically, jet fuel prices have risen roughly 132% year-over-year. Delta’s earnings and revenue misses are a warning for the transportation industry, part of the broader industrials sector. Elevated input costs can quickly erode margins for companies that rely heavily on oil, and when jet fuel surges even solid demand can be overshadowed. Delta Posts Earnings and Revenue Miss for Q1The Q1 results weren’t all bad. Bastian noted earnings were 40% higher year-over-year—consistent with Delta’s guidance at the start of the year—and revenue reached a record, rising more than 9% YOY. Still, some disappointing trends are hard to ignore. Delta's year-over-year revenue growth has declined each year since 2021, falling from nearly 75% to just 2.79% in 2025, despite record quarterly revenue. See financials for details. Earnings per share (EPS) of $0.64 missed analyst expectations by $0.06, and revenue of $14.20 billion missed the consensus by more than $497 million, raising concerns about Delta’s ability to reaccelerate revenue growth in 2026. The company attributes the quarterly misses to short-term headwinds. Delta says the conflict in the Middle East pushed jet fuel assumptions for Q2 to about $4.30 per gallon—roughly double the level in Q2 2025—and expects to incur more than $2 billion in incremental fuel expense during the current quarter. Despite Headwinds, Delta Issues Cautiously Optimistic Q2 GuidanceDelta plans to capture roughly 40% to 50% of that fuel headwind, a notable target given Bastian described the spike in jet fuel prices as “unprecedented.” That effort could offset up to $300 million in jet fuel costs through its vertically integrated refinery. Delta is the only U.S. airline that owns refining operations, after acquiring the Trainer Refinery from Phillips 66 (NYSE: PSX) in 2012 to secure fuel supply, better manage volatility, and produce jet fuel for its fleet. Bastian added the company’s focus “is on what we can control. Running a reliable operation, taking care of our people and customers, and protecting our margins and cash flow.” Reflecting that focus, Delta issued cautiously optimistic Q2 guidance, including:
YOY revenue growth: Low-teens Operating margin: 6% to 8% EPS: $1.00 to $1.50 per share With a forward price-to-earnings ratio of 8.93, Delta’s EPS is expected to grow nearly 9% over the next year, from $7.63 to $8.28. Those expectations are supported by the airline’s fleet modernization program, which includes 95 aircraft on order and eight new deliveries in Q1. Wall Street Remains Bullish on DeltaDespite the Q1 miss, Wall Street sentiment is largely positive: 24 of 26 analysts covering the stock rate it a Buy. Overall, DAL carries a Moderate Buy rating. The consensus 12-month price target is $79.14, implying more than 16% upside from current levels and above the 52-week high of $76.39. Current short interest of 3.7% suggests limited near-term downside expectations from bears. Last month, $971 million worth of DAL shares were shorted, down from a five-year high of $2.27 billion in December 2024. Institutional ownership remains strong over the past 12 months, with 915 buyers outnumbering 554 sellers, and inflows of $6.41 billion marginally exceeding outflows of $4.00 billion. |
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