TD Cowen has reaffirmed United Airlines and Delta Air Lines as its preferred airline stocks despite rising jet fuel prices, maintaining Buy ratings while trimming price targets across the sector.
Analyst Tom Fitzgerald kept United Airlines as the firm's 2026 top pick, lowering its price target to $192 from a prior level. The new target implies roughly 13.0 times projected 2027 earnings per share. Fitzgerald also adjusted earnings estimates for six major U.S. carriers and regional operator SkyWest, citing elevated fuel costs and updated capacity schedules.
Delta Air Lines retained its position as TD Cowen's second top pick, with a price target reduced to $105. The firm noted Delta's diversified revenue base, industry-leading loyalty program, and strongest balance sheet among peers. Fitzgerald highlighted Delta's growth focus on Asia Pacific, Africa, Middle East, and Austin, Texas, alongside a scaling maintenance and repair business.
United reported adjusted second-quarter earnings per share of $1.99, exceeding expectations, and raised the lower end of its 2026 guidance. Fitzgerald emphasized United's quality growth profile, premium corporate exposure, and loyalty revenue strength, while noting the pending renewal of its co-branded card deal and potential upgrade to investment-grade credit.
TD Cowen introduced 2028 forecasts to its models, reflecting ongoing capacity and fuel assumptions. Bernstein SocGen Group separately increased its price target on United to $162 while maintaining an Outperform rating following the airline's second-quarter results.
The sector faces margin pressure from higher fuel prices, though TD Cowen expects resilient travel demand to partially offset the impact. Corporate demand is projected to remain robust through the fall, while price-sensitive leisure travelers may curtail discretionary spending. Delta also announced a partnership with DraftKings to offer a non-gambling sports prediction game for passengers aged 21 and older on select flights.
