Delta Airlines Stock Declines, Rating Lowered by Deutsche Bank
In April 2015, Deutsche Bank analyst Michael Linenberg downgraded Delta Airlines stock from “Buy” to “Hold,” believing the stock’s value will not move much in the short term. In a research report released to the press, Linenberg cites the strength of the US dollar as well as probable diminishing returns on international sales as reasons for his outlook. Giving Delta a lowered price target of $58 (from $78), Deutsche Bank also downgraded other United States-based airlines including United Continental Holdings Inc. (from $60 to $50) and American Airlines Group Inc. (from $85 to $70). Linenberg still believes in the long term strength of the US-based airliners, stating that in the long term (greater than 12 months) the industry will boast significant cash flow and maintain strong management. American Airlines has recently been added to the S&P 500 stock index. Delta forecasts a decline of 1.5% in passenger revenue per available seat mile (PRASM) or unit revenues, an additional 0.5% more than the company’s previous estimates. However, the Ratings Team for TheStreet give Delta Airlines a “Buy” grade. In a statement released to the press, Delta Airlines announced lower than anticipated revenues for March. TheStreet believes that the company’s fundamental strengths compensate for its underwhelming net income. Delta has a debt-to-equity ratio of 1:11 but this figure is below the airline industry’s average. According to TheStreet, Delta’s quick ratio of 0.39 demonstrates weak liquidity. ASAP Semiconductor is a leading distributor of commercial aviation parts.
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