TD Cowen has reaffirmed United Airlines as its preferred stock in the U.S. airline sector, maintaining a Buy rating and reducing its price target to $192. The new target implies a 13.0 times multiple of projected 2027 earnings per share. Bernstein separately raised its price target on United to $162.
Delta Air Lines remains TD Cowen’s second top pick in the sector, also carrying a Buy rating, though its price target was cut to $105, or 14.0 times 2027 EPS. The firm added fiscal 2028 projections to its updated forecasts for both carriers.
United reported second-quarter adjusted earnings per share of $1.99 and raised the lower end of its full-year 2026 guidance. Higher jet fuel prices have pressured earnings estimates across the airline group, though TD Cowen notes resilience in travel demand and modest yield improvements.
The firm expects strong corporate travel demand to persist into the fall, while price-sensitive leisure travelers may curb spending amid elevated fuel costs. Sector preferences now favor airlines with robust balance sheets and diversified revenue streams, including corporate contracts, premium services, international routes, and loyalty programs.
Upcoming conference calls will focus on third-quarter demand trends, the ability to offset higher fuel expenses, and outlook for revenue per available seat mile in the fourth quarter of 2026 and first quarter of 2027. Fourth-quarter results should benefit from easier comparisons to last year’s U.S. government shutdown impact. Spirit Airlines’ exit from the market will also support year-over-year comparisons through April 2027.
Separately, Delta announced a partnership with DraftKings to introduce sports prediction games on select flights, expanding its ancillary revenue opportunities beyond traditional in-flight services.
