In short: Named only as a peer — with United, the earnings yardstick for Southwest: "half of what United or Delta made." No view on Delta.
37:27They don't make any money. Elliot Management's involved. They're getting rid of the middle seat. They're going to charge for bags. Blah blah blah blah blah. You know, if they earned half of what United or Delta made, it would be big stock. — Okay. — So, it was a good story. And then, you know, the hormos came along and the oil price, all this other stuff.
In short: Brown adds on the oil-driven dip — "anywhere under 80 is a steal." "Also added to Delta on this dip. Delta is being depressed with the other airlines because of crude oil back above 100. You wait and see how fast that reverses. One or two weak days for oil, the airlines will rip, and Delta probably more than the others because it is the best player in the group. I think anywhere under 80 is a steal." The explicit bet is that the oil headwind Lebenthal flagged a day earlier is temporary.
Airline stocks fall when oil rises, because jet fuel is one of their biggest costs. With crude above $100, Delta has dropped along with every other airline.
Brown thinks that is temporary and bought more. His bet is that oil prices swing fast, and a couple of weak days for crude would send airline shares sharply higher — Delta most, because it is the strongest airline. He calls anything under $80 a steal.
In short: Demand intact, oil the offset — three sessions after Lebenthal called its correction over. Lebenthal: "it had a great run up until earnings. I did say at the time that I thought it was a little bit ahead of itself. I didn't know that oil prices were going to rise this much. And look, that offsets the gain that you're seeing from the demand side… any airport… they are packed… airline ticket prices are going up but oil's a headwind and it will be for the foreseeable future." Terranova (owns DAL and UAL in JOET as momentum names) separates it from the group: "I think Delta is in a much better position. Technically, it sits above the 200 day moving average… I like Delta's loyalty rewards program, premium flyer, and they also have the refiner exposure."
In short: Lebenthal's final trade — an add on a completed correction, evidenced by the inflation print that spooked everyone else. "It feels like the correction in Delta Airlines is over. Airports are packed. We see in the CPI that airline tickets are up. Seems like a good time to add to it." The neat part is the reuse of the day's hot CPI as a revenue signal rather than a rates signal — the airfare component that pushes the Fed toward a hike is Delta's pricing power.
Delta is the premium end of US airlines. Lebenthal's case has two halves: the share-price correction looks finished, and the demand evidence is visible — "airports are packed."
The clever part is where he found his data. The same inflation report that pushed the Fed toward a rate hike showed airline ticket prices rising. Everyone else read that line as a reason to worry about policy; he read it as Delta's pricing power, and bought.
In short: Berkshire added to Delta inside the quarter it "finally put its cash to work, becoming a net buyer of stocks for the first time in 14 quarters." Notable because Berkshire famously exited the entire US airline sector in 2020 — this is an add, not a re-entry, but on the same list as the Alphabet build and the homebuilder adds.
In short: An insider-signal read, not a position: the CEO "exercised stock options and sold 19 million of his stock holdings after a 30% run-up in three months… it could be a strategic sell in his mind given that the market is anticipating an Iran war peace and Delta stock has rallied because of it. He doesn't seem to believe that it's a good risk reward at this moment." Deck page 11.
Not a position, but a signal he thinks is worth reading. Delta's chief executive exercised his stock options and sold $19 million of shares after the stock rose 30% in three months.
The run-up happened because airline shares rally when investors expect the Iran war to end and fuel prices to fall. So the person with the best view of the business chose to sell into exactly that optimism. "He doesn't seem to believe that it's a good risk reward at this moment."
Full passage: premium transcript (PDF).
In short: Lebenthal's exhibit for the broadening: as the other 493's earnings growth is set to surpass the Mag 7's in the second half, "you're seeing it in the stock price reaction. When you have a good economy, when you have broadening profit growth, a company like Delta is going to be approaching new highs as it is right now — and not just new highs, but a re-rating of the multiple."
Delta is Jim Lebenthal's proof that the market's gains are spreading beyond technology. His argument: with the other 493 companies in the S&P expected to out-grow the Mag 7 on earnings in the second half, an ordinary cyclical business benefits twice — from higher profits, and from investors being willing to pay a higher multiple for those profits. "A company like Delta is going to be approaching new highs as it is right now — and not just new highs, but a re-rating of the multiple."
In short: Q2 revenue +19% to $19.8B ($1.0B beat), adj EPS $1.56 ($0.06 beat, −26% Y/Y), 9% op margin, $1.4B first-half FCF. The premium model absorbed a record fuel bill ($4.4B adj, +77% Y/Y, highest ever): premium revenue +17%, loyalty +19%, American Express remuneration $2.4B (+16%, → ~$9B/yr); domestic unit revenue +12%. New basic-fare tiers for premium cabins; MRO on track to $1.2B (+50%); Delta Concierge AI lifted NPS. Reaffirmed FY26 EPS $6.50-7.50 (vs $5.97 consensus) + $3-4B FCF; declined FY27 guidance on geopolitical uncertainty. Shares dipped on fresh Iran-strike fuel fears. (Recap, not a stance call.)
Delta is a major US airline, and this was a strong quarter — revenue up 19% and a $1 billion beat — made more impressive by the fact that it swallowed the biggest fuel bill in its history ($4.4 billion, up 77%) without falling apart. How? Delta has deliberately shifted toward the profitable end of flying: premium seats (revenue +17%), its frequent-flyer loyalty program (+19%), and a huge cash stream from American Express, which pays Delta for the co-branded credit cards their customers use — $2.4 billion this quarter alone, on track for $9 billion this year. Those steady, high-margin revenue lines cushioned the fuel spike far better than a bare-bones airline could.
Delta is also getting more surgical on pricing — creating stripped-down "basic" versions of its premium cabins (no lounge, no free changes) so it can protect its top fares without discounting them. Its aircraft-maintenance business is growing 50%, and an AI assistant is smoothing customer service during delays. Management stuck with its full-year profit forecast ($6.50–7.50 a share, well above the ~$5.97 analysts expected) but refused to give any forecast for next year because renewed Iran tensions make fuel costs unpredictable. The article's question: can premium and maintenance keep offsetting wild fuel swings, or does another oil spike force Delta to cut flights? A recap, not a call.
In short: Owns it. "It is overbought" — rallied through the Iran-war de-escalation while earnings estimates stayed basically flat. Nothing fundamentally wrong; "own it for the long run," but won't put new money here and won't take the big tax hit to sell. Watch the earnings two weeks out. (Terranova: Delta/United now a duopoly capturing share.)
Lebenthal owns Delta and still likes it for the long haul, but he's hands-off right now. The stock jumped over the past month as the Iran conflict de-escalated (lower oil-war fears help airlines), yet analysts' earnings estimates for the company barely moved — so the price ran ahead of the fundamentals. That's what "overbought" means: up on momentum, not on improved numbers.
So his discipline here is "hold, don't add": nothing is wrong with the company, but he won't put fresh money in at an extended price, and he won't sell either — partly because selling a long-held winner would trigger a big capital-gains tax bill. He'll reassess at the next earnings report, about two weeks out. (A teammate notes Delta and United now operate as a duopoly steadily taking market share — a bullish longer-term backdrop.)
In short: "We're at the beginning of understanding Delta and United are a duopoly now." You're seeing market-share capture at both — "a powerful, entrenched bullish setup" (even if overbought near-term).
Terranova's airline thesis is structural, not a trade on the cycle: he thinks the market is only "at the beginning of understanding" that Delta and United have effectively become a duopoly — the two dominant carriers steadily taking market share from everyone else (to American Airlines' annoyance). When two players entrench like that, they gain pricing power and durability, which he calls "a powerful, entrenched bullish setup." Near-term the stock is overbought, but the long-run setup is what he's pointing at.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.