Will Delta achieve FY2026 adjusted EPS at or above $6.50 (low end of guidance)?

The guidance withdrawal is the strongest signal here. Management issued $6.50-$7.50 guidance in January with knowledge of elevated fuel, yet by April they withdrew it entirely. This means their internal models show a meaningful probability of missing even the $6.50 floor. Q1 EPS of $0.64 puts H1 on pace for roughly $1.64-$2.14 (with Q2 guidance). That leaves $4.36-$4.86 needed from H2. Q3 is historically Delta's strongest quarter and could produce $2.00-$2.50, but Q4 is weaker. Hitting $6.50 requires H2 averaging ~$2.18-$2.43/quarter, which needs fuel to normalize meaningfully below $4.00/gal. Possible but management clearly doesn't have confidence in it. ~30% probability.

Working the math: Q1=$0.64, Q2 midpoint=$1.25, so H1~$1.89. Need $4.61 from H2 (Q3+Q4). In FY2025, H2 produced roughly $3.80-$4.00 (Q3 strongest at ~$2.50, Q4 ~$1.30-$1.50). Even with 15% growth on H2 base, that gets to ~$4.40-$4.60 — still short of $4.61 needed. The path to $6.50 requires BOTH fuel normalization AND continued premium/demand strength AND successful fuel recapture. Any one failing makes it very difficult. However, if fuel drops to $2.50-$2.80 in H2 (which is possible if geopolitical tensions ease), the math works. The refinery benefit ($300M/quarter) and MRO growth ($1.2B target) provide incremental earnings support. Slight lean above 30%.

Taking a more cautious view. Bastian said 'higher for longer' on fuel, not that it will normalize. The $4.30/gal Q2 guidance likely embeds some conservatism, but even at $3.50/gal the margin compression is severe. The >$2B fuel headwind with only 40-50% recapture means $1B+ unrecovered costs annually. Capacity cuts help RASM but reduce total revenue, creating an EPS tension. The AmEx $2B+ and MRO $1.2B are bright spots but insufficient to offset $1B+ fuel drag. Pilot contract issues add operational friction. The base case is likely $5.50-$6.00 EPS, with $6.50 requiring a favorable fuel outcome that management itself doesn't expect.