Bear Of The Day: Delta Air Lines

Airlines were already facing several…wait for it…headwinds in the market. (UGH!) The largest being oil prices. As OPEC production cuts restrict supply, prices have been on the rise. With that huge cost dragging on profits, earnings estimates have suffered along with stock prices. Today’s Bear of the Day is one of these stocks. It’s Zacks Rank #5 (Strong Sell) Delta Air Lines (DAL).

I’m sure all of you know of Delta Air Lines, and most of you have flown the air lines once or twice. Delta is one of the major airlines of the United States and a legacy carrier, recognized as one of the world's oldest airlines still in operation¿¿¿. Delta is one of the world's largest airlines by traffic and revenues, serving over 800 destinations in about 130 countries through its regional carriers. It operates a mainline fleet of 1,200 aircraft and also engages in maintenance, repair, and overhaul (MRO) operations as well as cargo services.

The reason for the unfavorable rank is the recent negative earnings estimate revisions coming from analysts. Over the last thirty days, ten analysts have cut their estimates for the current year, while eight have done so for next year. Even over the last week, five analysts have cut for the current year and three for next year.

The bearish moves have slashed the Zacks Consensus Estimates. Current year numbers are off from $6.52 to $6.04 for the current year and down from $7.52 to $6.92 for next year.

The Transportation – Airline industry ranks in the Bottom 10% of our Zacks Industry Rank. There are a few names in the industry which are in the good graces of our Zacks Rank. Those include Zacks Rank #1 (Strong Buy) Air Canada (ACDVF) and Zacks Rank #2 (Buy) SkyWest (SKYW).


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