Delta Air Lines (DAL) Stock Closed Higher Today After U.S.- China Visa Deal Announced

NEW YORK (TheStreet) -- Shares of Delta Air Lines Inc. (DAL) closed up 1.59% to $43.37 today after the U.S. and China extended the validity of business and tourist visas from one year to 10, the longest allowed under U.S. law, in a move the White House said would inject billions of dollars into the economy, Bloomberg reports.

Delta CEO Richard Anderson praised President Obama today for reaching an agreement with China.

"This agreement between the U.S. and China to extend short-term visas for travelers between the U.S. and China will provide a significant economic boost to the U.S., and is expected to create hundreds of thousands of jobs nationwide," Anderson said, adding "China is becoming an increasingly important travel and tourism partner with the U.S., and this is an essential step in ensuring that the U.S,. receives the economic benefits."

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Delta, the third-largest U.S. airline, currently derives 1.6% of its $33 billion in annual passenger revenue from China, Delta told the Journal, but it has high hopes for the market, and last year carried about 1,200 passengers a day in each direction between the U.S. and China, up 55% since 2011.

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

"We rate DELTA AIR LINES INC (DAL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • Compared to its closing price of one year ago, DAL's share price has jumped by 59.59%, exceeding the performance of the broader market during that same time frame. 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.
  • DAL's revenue growth trails the industry average of 32.5%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $1,358.00 million or 16.96% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.99%.
  • The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: DAL Ratings Report

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