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Why Delta Air Lines (DAL) Stock Is Down Today

Stocks in this article: DAL

NEW YORK (TheStreet) -- Delta Air Lines  (DAL) fell Thursday as airline stocks took a hit, thanks in part to Imperial Capital's estimate reduction on American Airlines Group  (AAL).

Imperial reduced its earnings per share estimate for the first quarter to 45 cents from 66 cents and fiscal year 2014 estimate to $5.75 from $5.78. Severe winter weather forced American Airlines to cancel more than 34,000 flights, which led to a $115 million reduction in revenue and $60 million reduction in operating profit.

Delta dropped 4.98% to a one-day low of $33 at the close of trading on Thursday. United Continental  (UAL) fell 5.01% to $42.29, while Southwest Airlines LUV dropped 4.27% to $23.12.

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Separately, TheStreet Ratings team rates DELTA AIR LINES INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate DELTA AIR LINES INC (DAL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, good cash flow from operations, solid stock price performance and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to other companies in the Airlines industry and the overall market, DELTA AIR LINES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 105.63% to $1,131.00 million when compared to the same quarter last year. In addition, DELTA AIR LINES INC has also vastly surpassed the industry average cash flow growth rate of -73.48%.
  • Powered by its strong earnings growth of 98800.00% and other important driving factors, this stock has surged by 142.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DAL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 141216.7% when compared to the same quarter one year prior, rising from $6.00 million to $8,479.00 million.
  • You can view the full analysis from the report here: DAL Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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