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Delta Air Lines (DAL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Actuant (ATU) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Delta Air Lines (DAL) closed the most recent trading day at $48.73, moving +0.54% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.45%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq gained 0.42%.

Heading into today, shares of the airline had lost 13.86% over the past month, lagging the Transportation sector's loss of 4.02% and the S&P 500's loss of 1.64% in that time.

Investors will be hoping for strength from DAL as it approaches its next earnings release, which is expected to be January 15, 2019. The company is expected to report EPS of $1.25, up 30.21% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.83 billion, up 5.7% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for DAL. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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. Within the past 30 days, our consensus EPS projection has moved 1.42% lower. DAL is currently a Zacks Rank #3 (Hold).

Digging into valuation, DAL currently has a Forward P/E ratio of 7.47. For comparison, its industry has an average Forward P/E of 9.69, which means DAL is trading at a discount to the group.

We can also see that DAL currently has a PEG ratio of 0.5. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Transportation - Airline stocks are, on average, holding a PEG ratio of 0.43 based on yesterday's closing prices.

The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 39, putting it in the top 16% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DAL in the coming trading sessions, be sure to utilize Zacks.com.


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