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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Delta Air Lines, Inc. (XNYS:DAL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DAL
Name:
DELTA AIR LINES, INC. (XNYS:DAL)
Sector:
5.00M
Industry:
Airlines
CEO:
Mr. Edward Bastian
Total Employees:
83,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -24.51% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DELTA AIR LINES, INC.(DAL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AIRLINES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
30.94
One Month Price Target:
$31.14
Six Month Price Target :
$32.17
Likely Price in One Year's Time:
Ticker:
$33.4
Likely Trading Range Today Under (Normal Volatility)
$30.74
Price Upper limit ($) :
$31.13
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$28.57
This week:
$25.65
This month :
$20.36
Other Primary facts
Market Cap:
20.00B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
641.20M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.02%
-25.99%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$41.93
$36.94
$19.95
$24.94
Medium risk (<10%) entry points
Buy Call
Sell Call
$35.32
Buy Put:
Sell Put:
$34.26
$26.54
$27.62
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DAL
Sharpe Ratio:
-0.62%
Comparison:
DAL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is 13.57% higher than the industry
& is -127.16% lower than the market/S&P 500 average
Average Returns/Yield of
DAL
Daily returns:
-0.01%
Weekly returns:
-0.07%
Monthly returns:
-0.28%
Yearly returns:
-3.24%
Comparison of returns:
Average annual returns/yield (last 3 years) is 4.88% above industry average
Classification:
DAL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.32
Statistical test of Returns:
DAL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.72%
Weekly Volatility:
8.31%
Monthly Volatility:
16.62%
Yearly Volatility:
57.58%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.90%
Volatility in last five trading days has been -75.82% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.65%
Weekly VaR:
-17.10%
Monthly VaR:
-34.20%
How Much Can the price of
DAL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-30%
Worst case (decline):
>85%
This translates to price declining to:
$21.53
This translates to price declining to:
$4.64
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
DAL is a 141.38% riskier investment compared to the market/S&P 500 & is 106.79% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.52% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DAL
Beta in relation to market/S&P 500--1.18
Expected beta in 1 year's time:
1.093
Expected beta in 3 year's time:
1.546
Unlevered (debt free) Beta:
0.137
Beta in relation to Nasdaq (XNAS):
0.955
Beta in relation to all global stocks::
0.863
Beta Comparison & Analysis
Beta of competitors/peers::
1.205
Beta is -1.81% lower than peers
Average Industry Beta:
1.438
Beta is -17.76% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.78%
Sustainable growth rate is -4.02% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.147
Alpha is -9.80% below industry average alpha yield
Alpha is -933% below the market average
Analysis of Cost of Capital of
DAL
Equity cost of capital:
0.113
Equity cost of capital is -13.46% below industry mean WACC
Unlevered (without debt) cost of capital:
1.30%
Before-tax cost of debt:
3.56%
After-tax cost of debt:
2.81%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.81%
WACC is -11.36% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$54.74
Revenue growth rate per share of (3Y):
6.63
Annual revenue growth rate is 1.49% above the industry average
EPS:
$0.79
Expected Annual growth rate of EPS (3Y):
-60.83%
Expected future EPS growth rate is 154.73% higher than the Airlines industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 42.86% higher than the industry
Debt per share
$49.35
EBITDA per share
$5.33
Valuation Analysis Today of
DAL
P/E Ratio:
33.62
P/E Ratio of Competitors/Peers:
24.82
P/E ratio is 35.46% higher than main peers & is 5.82% higher than the industry
Stock price/value with industry average P/E ratio: $25.10
DAL is 23.27% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $14.45
Present value of the expected future dividends only: $7.15
P/S (Price to Sales ratio):
0.57
Price to sales ratio is -46.76% below the industry mean
P/B (Price to book value ratio):
6.63
-
Price to free cash flow ratio is 98.45% higher than the industry
Net income growth rate (3Y):
-85.78%
Net income growth rate is -24.29% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 2.60%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $0.81
-
-
Average dividend payment (long-term): $0.40
Average dividend increase/decrease (growth rate) % per period: 0.00%
-
-
-
Previous dividend payment date: 03/12/2020
Previous dividend record date: 20/02/2020
Previous dividend declaration date: 02/06/2020
Dividend History:
2020-02-19--$0.40
--$0.00
--$0.00
2019-10-23--$0.40
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
1057.84%
Net debt to equity ratio:
862.42%
Debt to assets ratio:
42.90%
Net debt to assets ratio:
34.98%
Debt-to-asset ratio is -35.06% below industry average
Ability to repay debt:
Interest coverage ratio:
2.87
Interest coverage ratio is 76.65% more than industry average
Looking forward:
Debt growth rate:
-24.27%
Annual debt growth is -468% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.36%
Analysis of Key Statistics
Correlation of price movement with the market:
0.577
Statistical significance of correlation:
DAL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.536
Stock price is 7.57% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.536
Correlation of price movement with Nasdaq (^IXIC):
0.052
Covariance of price movement with the market:
0.113
Kurtosis
8.607
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.121
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DAL
Gross Profit Margin Ratio:
21%
Operating Profit Margin Ratio:
7.13%
Operating profit margin is -6531.13% lower than the industry
Net Profit Margin Ratio:
21%
Effective Tax Rate:
27.63%
Effective tax rate is 13.06% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
17.25%
Return on equity (ROE) is -2751.11% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.70%
Return on assets (ROA) is 569.24% higher than the industry
Financial Leverage:
1.8x
Current Ratio:
0.65
Current ratio is -46.69% below industry average
Cash Conversion Cycle (days):
-21.5
Cash conversion cycle is -142.27% below industry average
The remaining useful life of property plant & equipment is: 3.9 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
422.9K
Each employee generates 36% more revenue than industry average revenue per employee
EBITDA generated per employee:
41.1K
Each employee generates 117% more EBITDA than industry average revenue per employee
Profit generated per employee:
6.2K
Each employee generates -238% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.1K
Each employee generates -98% less free cash flow than industry average revenue per employee
Assets/Capital per employee
699.1K
Each employee generates -98% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DAL
KANSAS CITY SOUTHERN (XMEX:KSU*)
DOVER CORPORATION (XNYS:DOV)
SOUTHWEST AIRLINES CO. (XNYS:LUV)
INGERSOLL RAND INC. (XNYS:IR)
UNITED RENTALS, INC. (XNYS:URI)
ZTO EXPRESS (CAYMAN) INC. (XNYS:ZTO)
STANLEY BLACK & DECKER, INC. (XNYS:SWK)
CNH Industrial NV (XNYS:CNHI)
TRANSUNION (XNYS:TRU)
Current Analyst Ratings
Strong buy�29%
Buy�46%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
35.10B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
33.15B
1.95B
-
108.00M
1.26B
1.16B
- 1832000.00K
- 569000.00K
-
1.19B
1.51B
3.42B
2.50B
516.00M
713.00M
197.00M
516.00M
Statement of Cash Flow
Date:
Period:
506.00M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
2.21B
Accounts Receivables:
-
Other Working Capital:
- 546000.00K
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
1.77B
Investments in PP&E:
- 1766000.00K
Net Acquisitions:
- 100000.00K
Purchases of Investments:
- 226000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
7.71B
2.25B
9.96B
3.04B
1.29B
1.43B
15.72B
37.44B
9.75B
6.00B
2.00B
1.53B
1.30B
58.03B
-
73.75B
4.81B
1.86B
-
11.85B
5.54B
24.06B
31.64B
10.15B
46.70B
-
70.76B
-
- 1088000.00K
- 7071000.0K
-
March 31, 2022 at 6:00:00 AM
32.58B
2.99B
73.75B
4.25B
33.50B
25.8B
1.35B
- 3000.00K
- 749000.00K
- 1443000.00K
-
-
-
- 13000.00K
- 1456000.00K
-
- 434000.00K
8.14B
8.57B
1.77B
- 1766000.00K
5.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
DAL
2023
2024
2025
2026
2027
$25.40
$27.41
$29.59
$31.95
$34.49