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Delta Air Lines (DAL) Stock Sinks As Market Gains: Here's Why

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Delta Air Lines (DAL - Free Report) ended the recent trading session at $63.41, demonstrating a -0.64% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 0.25%. Meanwhile, the Dow lost 0.29%, and the Nasdaq, a tech-heavy index, added 0.97%.

The airline's shares have seen an increase of 9.3% over the last month, surpassing the Transportation sector's gain of 5.64% and the S&P 500's gain of 3.51%.

The investment community will be paying close attention to the earnings performance of Delta Air Lines in its upcoming release. On that day, Delta Air Lines is projected to report earnings of $1.75 per share, which would represent year-over-year growth of 36.72%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.91 billion, up 4.84% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.07 per share and a revenue of $60.17 billion, representing changes of -2.88% and +3.65%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Delta Air Lines. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Delta Air Lines is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Delta Air Lines is holding a Forward P/E ratio of 10.52. This denotes a premium relative to the industry's average Forward P/E of 10.25.

We can additionally observe that DAL currently boasts a PEG ratio of 1.21. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Transportation - Airline industry stood at 1.17 at the close of the market yesterday.

The Transportation - Airline industry is part of the Transportation sector. This industry, currently bearing a Zacks Industry Rank of 26, finds itself in the top 11% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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