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Here's Why Investors Should Give Delta Air Stock a Miss Currently

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Key Takeaways

  • Delta Air Lines faces lower earnings estimates for Q3 2026, full-year 2026 and 2027.
  • DAL's non-fuel CASM rose 7% in first-half 2026 as recovery and crew-related costs increased.
  • Delta Air Lines' fuel and related tax expenses jumped 41% year over year in first-half 2026.

Delta Air Lines (DAL - Free Report) is currently mired in multiple headwinds that, we believe, have made it an unimpressive investment.

Let’s delve deeper.

DAL: Key Risks to Watch

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for third-quarter 2026 earnings has moved 10.5% south in the past 60 days. For the current year, the consensus estimate for earnings has been revised 8.4% lower over the same period. Even for 2027, the earnings estimate has moved south. These unfavorable estimate revisions indicate brokers lack confidence in the stock.

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Dismal Price Performance:  The company’s price trend reveals that its shares have lost in double digits (%-wise) over the past three months, underperforming the Zacks Transportation sector’s decline.

3-Month Price Comparison

Zacks Investment ResearchImage Source: Zacks Investment Research

Weak Zacks Rank: DAL currently carries a Zacks Rank #5 (Strong Sell).

Other Headwinds: Delta’s non-fuel cost base continues to move higher, led by wages and crew-related items. Salaries and related costs increased 8% in 2025 to $17.5 billion, reflecting wage increases, including for pilots. In the first half of 2026, non-fuel CASM (CASM-Ex) increased 7% year over year to 14.58 cents, with management citing higher recovery costs and the continuation of higher crew-related costs. Until these cost pressures ease, margin expansion can be constrained even when demand is supportive.

The conflict in the Middle East has driven a sharp jump in oil prices, and airlines remain exposed because most U.S. carriers have abandoned broad fuel-hedging strategies. Delta’s September-quarter outlook assumes a fuel price of approximately $3.15 per gallon.

Expenses on aircraft fuel and related taxes increased 41% year over year in the first half of 2026. The Trainer oil refinery supplies only part of jet fuel needs and provides a variable per-gallon benefit that fluctuates with crack spreads and reliability. Premium, loyalty and diversified revenue streams may improve resilience, but current fuel volatility and elevated crew-related costs leave a meaningful risk that pressures earnings.

Bearish Industry Rank: The industry to which DAL belongs currently has a Zacks Industry Rank of 233 (out of 247). Such an unfavorable rank places it in the bottom 6% of Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.

Stocks to Consider

Investors interested in the same sector may consider better-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) and EuroDry (EDRY - Free Report) .

Expeditors currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EXPD has an expected earnings growth rate of 28.6% for 2026. The company has an encouraging earnings surprise history. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 17.2%.

EuroDry sports a Zacks Rank #1. The positive sentiment surrounding EDRY stock is evident from the fact that the Zacks Consensus Estimate for the third quarter of 2026 and full-year 2026 earnings has been revised upward by 31.8% and 35.1%, respectively, in the past 60 days.

Its expected earnings growth rate for the third quarter and full-year 2026 is more than 100% each. Shares of EuroDry have surged significantly year to date.  

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