Why Delta Air Lines Stock Is Down By 4% Today

Key Insights

• Airline stocks drop after Russia attacks Ukraine but rebound from session lows
• The major conflict adds to uncertainty brought by the coronavirus pandemic
• Near-term dynamics of Delta Air Lines stock would be determined by general market sentiment, as the direct impact of the conflict is limited

Delta Air Lines Stock Retreats Amid War In Ukraine

Shares of Delta Air Lines gained strong downside momentum at the start of today’s trading session after Russia attacked Ukraine.

Other airline stocks are also moving lower today. American Airlines Group is down by 3% today, while United Airlines Holdings is down by 4%. It should be noted that airline stocks have already moved away from their lows.

The major conflict in Ukraine has already led to cancelled flights in the region of the conflict. Investors fear that the situation may escalate further, and the huge territory of Russia might become unavailable for civil aircraft. Such a scenario is theoretically possible in case sanctions are imposed on Russia’s Aeroflot.

What’s Next For Delta Air Lines Stock?

At this point, it is unclear whether the air traffic will be targeted by sanctions and whether U.S. – based airlines will face any major problems as their main markets are far away from the territory of active combat.

Currently, analysts expect that Delta Air Lines will report earnings of $1.96 per share in the current year, so the stock is trading at 19 forward P/E for 2022. However, earnings are expected to grow to $5.69 in the next year.

The dramatic escalation of the conflict between Russia and Ukraine has already put additional pressure on the market sentiment, so it’s not surprising to see that the whole airline segment was moving lower in today’s trading.

However, the real impact on the financials of Delta Air Lines and other U.S. airlines may be minimal, so their stocks may have a good chance to develop upside momentum in the upcoming trading sessions. The key risk right now is the continued escalation of the current situation in Ukraine, which could put additional pressure on global markets.

For a look at all of today’s economic events, check out our economic calendar.