12 Most Undervalued Large Cap Stocks to Buy Now

4. Delta Air Lines Inc. (NYSE:DAL)

Forward Price-to-Earnings Ratio as of March 4: 7.99

Number of Hedge Fund Holders: 84

Delta Air Lines Inc. (NYSE:DAL) provides scheduled air transportation for passengers and cargo both domestically and internationally. It operates through two segments, Airline and Refinery. It has a robust network centered on core hubs in the US and significant international hubs, which offers tickets through various channels and provides additional services like aircraft maintenance and vacation packages.

Its customer loyalty strategy is centered on SkyMiles (a frequent flyer program) and its American Express partnership. It contributed $7.4 billion in 2024 revenues with plans to reach $10 billion in the long-term. The company is investing in technology and introduced AI-powered Delta Concierge to simplify travel. It partnered with YouTube for enhanced in-flight entertainment, and collaborated with Uber to expand SkyMiles’ earning opportunities beyond flights.

The company’s full-year 2024 revenue reached a record $57 billion, which was a 4% increase from 2023. Delta Air Lines Inc. (NYSE:DAL) now projects revenue growth of 7% to 9% for 2025. It also expects to generate over $4 billion in free cash flow. It’s focused on improving efficiency through better fleet utilization and workforce optimization, which will contribute to its financial goals.

Oakmark Fund views Delta Air Lines Inc. (NYSE:DAL) as a competitively advantaged, premium brand with strong fundamentals and an attractive valuation, even within a currently out-of-favor industry. It stated the following regarding the company in its first quarter 2024 investor letter:

“Delta Air Lines, Inc. (NYSE:DAL) is a leading global airline. Of the big three U.S.-based airlines (Delta, United and American), we see Delta as the most competitively advantaged. We believe the company’s years of industry-leading operational performance and investments in the customer experience have established Delta as the premium brand in the industry. We also think its geographically optimal hubs, high local market share, robust loyalty program and unique corporate culture all support healthy returns on capital. Delta currently trades at 6x our estimate of normalized earnings per share. We believe this is an attractive valuation for a competitively advantaged and growing business in an out-of-favor industry.”