Delta Air Lines reported Q3 earnings of $1.57 versus the $1.53 estimate. Revenue also beat coming in at $11.06 billion versus the $11.03 billion estimate.
Cowen and Company also upgraded Delta Air Lines to an Outperform rating and set a price target of $62 which represents a +16.8% upside from the previous close of $53.07. You can read an edited transcript of Delta’s earnings call here.
Delta Air Lines Stock Chart
The large players volume is blasting off to the moon after a pocket pivot signal back on October 3, 2017. The Twiggs Money Flow is not as strong as we would like to see but it is positive which suggests Delta Air Lines stock is being accumulated.
DAL is trading above all its moving averages:
I first wrote about Delta Air Lines being a good long trade here. As far as if DAL is a good long entry now, I think price movement has been a little bit too volatile to find a good entry and exit point. It is probably a good idea to wait for a consolidation first.
Delta Air Lines Review
DAL's Return On Assets of 7.16% is among the best of the industry. DAL does better than the industry average Return On Assets of 6.17%. DAL's Return On Equity of 27.51% is among the best of the industry. DAL does better than the industry average Return On Equity of 18.65%. DAL's Profit Margin of 9.30% is inline with the rest of the industry. The industry average Profit Margin is 8.55%. DAL has a Piotroski-F score of 4.00. This indicates an average health and profitability for DAL.
With a Price/Earnings Ratio of 9.58, the valuation of DAL can be described as very reasonable. Compared to an average industry Price/Earning Ratio of 11.51, DAL is valuated a bit cheaper than its industry peers. With a Forward Price/Earnings Ratio of 9.11, the valuation of DAL can be described as very reasonable. When comparing the current price to the book value of DAL, we can conclude it is valued correctly. It is trading at 2.60 times its book value. When comparing the price book ratio of DAL to the average industry price book ratio of 2.59, DAL is valued inline with its industry peers. The high PEG Ratio, which compensates the Price/Earnings for growth, indicates DAL does not grow enough to justify the current Price/Earnings ratio.
The Earnings Per Share has been growing by 33.52% on average over the past 5 years. This is a very strong growth. The EPS growth is accelerating: in the next 2 years the growth will be better than in the last years. DAL is expected to show a small growth in Earnings Per Share. In the coming 2 years, the EPS will grow by 0.66% yearly. The Revenue has decreased by -1.06% in the past year. DAL shows a small growth in Revenue. Measured over the last 5 years, the Revenue has been growing by 1.69% yearly. The earnings per share for DAL have decreased strongly by -17.75% in the last year.
The Debt to Equity ratio for DAL is way better than the industry averages. The Piotroski-F score of DAL is 4.00. This is a neutral score and indicates average health and profitability for DAL. A Current Ratio of 0.43 indicates that DAL may have some problems paying its short term obligations. Compared to an average industry Current Ratio of 0.82, DAL is worse placed to pay its short term obligations than its industry peers. 82% of its industry peers have a better Current Ratio. DAL has a Quick Ratio of 0.43. This is a bad value and indicates that DAL is not financially healthy enough and could expect problems in meeting its short term obligations. Compared to an average industry Quick Ratio of 0.80, DAL is worse placed to pay its short term obligations than its industry peers. 82% of its industry peers have a better Quick Ratio. Based on the Altman-Z score of 1.67, we must say that DAL is in the distress zone and has some risk of bankruptcy. When comparing the Altman-Z score of DAL to the average industry Altman-Z score of 2.21, DAL is less financially healthy than its industry peers.
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