Delta Air Lines (DAL) Stock Slides on Airline Sector Weakness
NEW YORK (TheStreet) -- Delta Air Lines (DAL) - Get Report stock is slumping 0.65% to $35.39 in late-afternoon trading on Wednesday after Credit Suisse trimmed its earnings estimates for this year, 2017 and 2018 for the airline operator.
At the same time, the firm downgraded its rating on Delta's competitors American Airlines (AAL) and United Contental (UAL).
Rising fuel prices, a lack of capacity cuts and higher labor costs are weighing on airlines, Credit Suisse said in a note released earlier today.
"Since January, we are less optimistic overall on the industry's ability to recapture pricing in a rising fuel environment -particularly outside the U.S.," the firm wrote. "Capacity growth continues to outpace GDP in all regions and the industry's willingness to meaningfully trim growth with oil still in a historically inexpensive range of $50 per barrel is low."
The Bloomberg U.S. Airlines Index has fallen about 26% so far this year amid concerns that carriers haven't acted to stem the growth of available seats, which is expanding faster than GDP, Bloomberg reports.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Delta Air Lines' strengths such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: DAL
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.