Delta Air Lines stock, currently valued at $43.40 per share, is being weighed down on an inflation note with a 15% decrease. At such a stage, one might want to assess the current state of stock prices of the US airline industry. Are US airlines feeling the pressure of the current macroeconomic environment that’s hitting hard with the high rate of inflation, pricing, and costs? Is the post-pandemic woes still taking a toll over the Delta Air Lines stock performance? Let’s find out!
Delta Air Lines Profile
Established in 1930, the Georgian-headquartered US airline has edged itself among the oldest top 7 airlines currently serving. The stock gained global traction, engaging as a major carrier in the field of air transportation for passengers and cargo across the US and international destinations. The stock also managed to fare well with other ancillary businesses, such as its refinery segment, which is prominently scheduled for jet fuel and non-jet fuel production.
Where is the Delta Air Lines stock headed?
Delta Air Lines stock trading credentials 2024
| stock price | 43.40 |
| stock CHG% | 2.03% |
| stock average price target | $61.50 |
| stock daily high | 43.03 |
| stock daily low | 44.34 |
| Delta Air Lines stock volume | 6,984,884 |
| Delta Air Lines stock 52-week high | $53.86 |
| Delta Air Lines stock 52-week low | $30.60 |
| Delta Air Lines stock price valuation | $54 per share |
| Delta Air Lines stock beta value | 1.31 |
Delta Air Lines stock technical forecasts
Stock returns
With a negative 16% in 2022 to riding on an average of 23% in annual stock returns for the last two years, Delta Air Lines has minted a less volatile trend. Delta Air Lines stock seems to have outperformed in comparison to the S&P 500 base of 30 stocks collection.
Moving average
The Delta Air Lines stock price valued at $44.28, in comparison with the 10 day moving average of 41.66, suggests a buy signal from forecasters. While in contrast, a 100-day moving average of 43.86 depicts a sell signal.
Stock strength indicators
The stock projects a neutral stand with the strength indicators such as the Relative Strength Index (RSI) being 53.30, the Trend Strength indicator (ADX) of 25.80, and the Commodity Channel Index (CCI) of 98.73. A buy signal emerges with its price rate of change indicator at 4.68.
Delta Air Lines stock analysis
| Delta Air Lines stock market capitalization | $28.58 billion |
| Operating margin | 14.7% |
| Earnings per share | 2.36 |
| Net debt | $24.81 billion |
| Price-earnings ratio | 6.23 |
| Dividend yield | 1.38% |
| Price to sales ratio | 2.33 |
| Price to cash flow ratio | 4.00 |
| Enterprise value to EBITDA | 5.96 |
| Enterprise value to sales | 0.85 |
| Debt to enterprise value | 0.56 |
| Return on assets | 5.72 |
| Return on equity | 52.12 |
| Return on capital | 13.41 |
| Book value per share | 19.19 |
| Interest coverage | 7.50 |
Stock analyst interpretations
Growth pattern
A resurgence of 3.5% in the global travel and tourism phase post-pandemic has poised the Delta Air Lines stock to project an earnings growth of 7.94% within the next two years.
Financial count
The earnings per share estimate has lowered significantly from 1.90 to 1.31. The stock’s portfolio could resurface with a negative index owing to this count.
Lost revenue
$380 million is sidelined as the lost revenue amount, citing operational incidents.
Encountering pressures
The increased volatility in oil prices, costs, pricing, and employee wage demands has led to a disappointing revenue engagement for Delta Airlines.
Peer comparison
Leaving behind American Airlines and Southwest Airlines by a stock price change of $0.22 and $0.44, respectively, Delta Airlines is potentially serving well in the industry. Growing operational stability by catering to customers with top-class service with differentiated products.
Factors affecting the Delta Air Lines stock price
Inflation rate troubles
As the US inflation rate narrows down to a 43-month low of 2.5% yearly average, the US airline fares have declined by 1.3%. The inflation rate effects can take a negative toll on the payment processing of operational costs that include staff salaries, accommodations, and airline services.
Volatile oil pricing
With the current US inflation rate, the cost of energy and gasoline prices have taken a fall by 0.8% and 0.6%, respectively. Jet fuel prices have substantially increased by 150% from last year. The cause? An escalation in the Middle East border issues concerning Iran and Yemen has commercially spiked the increase. Such patterns can negatively impact the sound operations and costs of Delta Airlines.
Concerning costs
US airline pricing is up by 25%, and this could be potentially due to the increase in concerns regarding the growing labor costs and consumer’s cheaper flight preference. Inadequate labor to accommodate services is also deemed to fuel this concern.
Insufficient earnings projection
With an adjusted earnings forecast of $6-$7, the Delta Air Lines stock with reduced earnings outlook is putting investors in turmoil. Shares are declining, with the earnings experiencing a downfall of 8%.
Suppliers fail to markup
Supply chain issues are rising post pandemic woes. Delta Airlines has reported a hindrance in acquiring equipment and parts from suppliers. Such a phase was traversed due to the supplier’s inexperience post-pandemic disruption to the global supply chain.
Covid setback
The pandemic has definitely caused a global disruption in supply chain matters but has also plummeted airline stock prices by 0.6%. Causing a decrease in US airlines’ profitability, revenue growth, and stock prices.
Competitors benchmarking
| Competitors | Stock price | Market Capitalization | Price change |
| Southwest Airlines | $28.81 | $17.53 billion | 3.88% |
| American Airlines | $10.77 | $7.22 billion | -23.46% |
| United Airlines | $48.47 | $15.92 billion | -3.34% |
| JetBlue Airlines | $5.65 | $2.00 billion | 3.52% |
| Alaska air group | $39.49 | $5.00 billion | -0.8% |
Promoter holding
| Delta airlines company inside holders | 17.07% |
| Mutual fund investors | 31.46% |
| Institutional investors | 51.36% |
| Other public companies and retail investors | 0.08% |
| Highest shareholding | Vanguard 9.99% |
Frequently Asked Questions
Is it profitable to buy the stock?
With a positive earnings forecast, analysts suggest a strong buy for the stock.
What is the Delta airlines stock target 2025?
With an expected targeted price average of $61.50, analysts estimate a minimum and maximum price target for the year 2025 to be in between $50-$85.
Who owns most of the shareholding at Delta Airlines?
Vanguard reserves a 9.99% holding followed by institutional investors, retail investors, public companies, and others. Refer to the above article’s promoter holding section for more information.
What is the stock financial analysis?
A revenue growth of $60.1 billion and an operating margin increase to 9.9% depicts how well the company can fare in terms of services and operational efficiency.
Conclusion
As the stock is poised to earn a positive gains outlook within two years, analysts mint at a strong buy profile. Although the oil price volatility, increased costs coupled with inflation rates are on the rise posing a risk to the company’s profitability patterns.
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