- Investors are keeping a sharp watch on key metrics at Delta Air Lines (NYSE:DAL) with the company on pace to end the year with four straight quarters of negative unit revenue growth (1Q -4.6%, 2Q -4.9%, 3Q -6.8%, 4Q -3.0% est.).
- Delta is also expected to miss its annual operating margin target of 17% to 19%.
- With Delta's costs expected to rise 2% to 3% in 2017, there's even more pressure on management to return unit revenue back into positive territory, notes CAPA.
- Two factors working in Delta's favor are the company's determination to keep capacity growth at 1% and the recent bounce in business demand. On the international front, the investment in Aeromexico and improved relations with Korean Air could pay off.
- Shares of Delta are down 1.58% YTD. The airline stock trades with a forward P/E ratio of 8.07. That last part may be what attracted Berkshire Hathaway (NYSE:BRKa) to invest in Delta last month.
Original article