Delta Air Lines enters the final weeks before its June 18 earnings report with a notable shift in positioning — the short pile-up that defined last week has reversed, even as the broader airline sector takes a beating.
Short interest has pulled back from its recent peak. SI dropped to 3.76% of the free float by May 19, down from the 4.2% high reached on May 14 that drove last week's note. The position shed roughly 2.9 million shares over just four sessions. That unwind is the clearest change since the prior article: the accelerating build has stalled and partially reversed, bringing SI back in line with where it was running in late April. At 3.76%, the level remains above the April lows near 3.4%, but the urgency of the short-side conviction has visibly eased.
Options traders are less convinced the danger has passed. The put/call ratio held at 1.17 on May 19 — above its 20-day average of 1.12, and roughly one standard deviation elevated. That's a step down from the near-maximum defensiveness of last week's 1.20 reading, but still signals more hedging demand than usual. The 52-week range runs from 0.63 to 1.23, so options traders remain closer to the cautious end of the spectrum. Borrow conditions are comfortable: the cost to borrow is 0.53%, up 13% on the week but still firmly in "low" territory. Availability runs at over 900% of current short interest, meaning shares are plentiful for anyone wanting to establish or add to a short position.
The Street remains firmly bullish on Delta, and recent moves have leaned constructively. Bernstein raised its target to $88 on May 11, maintaining Outperform. UBS lifted its target to $95 a few days earlier, keeping its Buy rating. The consensus mean target of $80.37 implies roughly 19% upside from the current $67.76 close — a gap that has widened as the stock has slipped 5.5% over the past month. The valuation setup looks undemanding: the P/E sits near 10.5x, and EV/EBITDA has drifted lower over the past 30 days. The EV/EBIT factor score ranks in the 76th percentile, pointing to reasonable earnings quality relative to enterprise value. EPS momentum over 30 days scores 68th percentile, though the 90-day reading at 23rd percentile signals the near-term picture is better than the trend.
The ownership backdrop adds an interesting wrinkle. Berkshire Hathaway reported holding 39.8 million shares — roughly 6.1% of shares outstanding — with that entire position recorded as a new addition in the most recent filing period. Whether that reflects a fresh build or a reclassification of an existing holding, Berkshire's presence as a top-three holder provides notable fundamental support. Vanguard and BlackRock hold 11.4% and 6.8% respectively, making the top of the register firmly passive. On the insider side, selling has dominated recent months. CEO Edward Bastian sold $7 million worth in February. COO John Laughter sold a combined $5.8 million in April. The pattern is consistent and one-directional, though the significance scores are moderate. No insider buying has appeared in the data window.
The sector context is sharp. UAL fell 7.0% on the week and ALGT dropped 9.8%. SKYW lost 7.9%. Delta's own 4.2% weekly decline looks relatively contained against that peer backdrop, echoing the theme from the prior peer note — premium carriers appear to be absorbing the sector selloff better than budget and regional operators. The April earnings print provides a relevant anchor: Delta gained 3.4% on the day and 9.7% over the following five sessions after Q1 results. With the next report on June 18, the question is whether the current combination of easing short pressure, still-elevated options hedging, and a sector-wide risk-off move sets up a similar dynamic — or whether the macro environment has shifted the equation enough to change the calculus entirely.
What to watch heading into June 18: whether the short unwind continues at this pace, whether the put/call ratio normalises back toward 1.10 as the date approaches, and whether Delta's relative outperformance within the airline peer group holds as macro headlines continue to move the sector.
See the live data behind this article on ORTEX.
Open DAL on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
