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Valued at $30.3 billion by market cap, Atlanta-based Delta Air Lines, Inc. (DAL) operates as the oldest airline in the U.S. The company primarily focuses on providing air transportation for passengers as well as cargo in the U.S. and internationally. With a fleet of approximately 1296 aircraft, Delta operates as one of the largest airlines in the world.
Companies worth $10 billion or more are generally described as "large-cap stocks," Delta Air Lines fits the bill perfectly. Given the company’s dominance and influence in the airline industry, its valuation above this mark is unsurprising.
Despite its strengths, DAL stock has plunged 34.4% from its all-time high of $69.98 touched on Jan. 22. Furthermore, DAL stock has declined 22% over the past three months, underperforming the Dow Jones Industrials Average’s ($DOWI) 1.8% dip during the same time frame.
Delta’s performance has remained grim over the longer term as well. DAL stock dropped 2.1% over the past six months and gained 5.7% over the past 52 weeks, lagging behind Dow’s 19 bps uptick over the past six months and 7.2% returns over the past year.
To confirm the recent sharp decline, DAL stock fell below its 50-day moving average in late February and below its 200-day moving average in early March.
Delta Air Lines’ stock prices soared 9% after the release of its most profitable Q4 results on Jan. 10. Driven by strong holiday travel demand, Delta’s financials experienced a significant boost. While the company’s passenger revenue per available seat mile remained mostly flat compared to the year-ago quarter, its revenue passenger miles increased 4.7%. Alongside the company also observed a notable increase in cargo and other revenues. Its overall topline increased 9.4% year-over-year to $15.6 billion, exceeding the Street’s expectations by 3.8%. Meanwhile, its adjusted net income surged 45.6% year-over-year to $1.2 billion and its adjusted EPS of $1.85 surpassed the analysts’ estimates by 5.1%.
However, Delta has notably underperformed its peer United Airlines Holdings, Inc.’s (UAL) 34.7% gains over the past six months and 63.8% returns over the past 52 weeks.
Nevertheless, analysts remain confident in Delta’s longer-term prospects. The stock has a consensus “Strong Buy” rating among the 21 analysts covering it. DAL’s mean price target of $79.33 suggests a staggering 72.8% upside potential from current price levels.
On the date of publication, Aditya Sarawgi 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.
