DAL – Market expectations are for Uniform ROA to inflect positively, and management is confident about demand and growth

• Delta Air Lines (DAL) currently trades at a premium to Uniform assets, with a 1.6x Uniform P/B (V/A’).
• At these levels, markets are pricing in expectations for Uniform ROA to positively inflect to 7%, accompanied by 3% Uniform asset growth.
• Meanwhile, analysts expect Uniform ROA to improve to 9% by 2022, accompanied by 33% Uniform asset growth.
• If sustained going forward, these levels would imply significant equity upside for the firm, but post-pandemic growth may not be sustainable in the long run.
• Meanwhile, the firm’s most recent earnings call suggests management is confident about demand and growth.