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Atlanta, Georgia-based Delta Air Lines, Inc. (DAL) provides scheduled air transportation for passengers and cargo. With a market cap of $33.7 billion, the global airline leader offers flight status information, bookings, baggage handling, and other related services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and DAL perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the airlines industry. DAL's operational reliability is key to its success. This commitment has earned DAL prestigious awards and recognition. The airline's profit-sharing program aligns employee’s interests with the company's success. With a fleet of 1,273 aircraft, DAL offers over 4,000 daily flights globally.
Despite its notable strength, DAL slipped 29.7% from its 52-week high of $69.98, achieved on Jan. 22. Over the past three months, DAL stock has gained 5.3%, underperforming the Industrial Select Sector SPDR Fund’s (XLI) 10.9% gains during the same time frame.
In the longer term, shares of DAL dipped 18.7% on a YTD basis and fell marginally over the past 52 weeks, underperforming XLI’s YTD gains of 9.5% and solid 18.2% returns over the last year.
To confirm the bearish trend, DAL has been trading below its 200-day moving average since early March. However, the stock is trading above its 50-day moving average since early May.
Delta's underperformance is due to economic uncertainty and trade conflicts negatively impacting the travel market, resulting in softness in consumer and corporate travel. In response, Delta is reducing expected capacity growth to align supply with demand.
On Apr. 9, DAL shares closed up more than 23% after reporting its Q1 results. Its adjusted EPS of $0.46 surpassed Wall Street expectations of $0.40. The company’s revenue was $14 billion, exceeding Wall Street forecasts of $13.8 billion. DAL expects Q2 adjusted EPS in the range of $1.70 to $2.30.
In the competitive arena of airlines, Southwest Airlines Co. (LUV) has taken the lead over DAL, showing resilience with a marginal loss on a YTD basis and a 19.4% uptick over the past 52 weeks.
Wall Street analysts are bullish on DAL’s prospects. The stock has a consensus “Strong Buy” rating from the 21 analysts covering it, and the mean price target of $61.23 suggests a potential upside of 24.5% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
