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Are Investors Undervaluing Delta Air Lines (DAL) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Delta Air Lines (DAL). DAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.30, while its industry has an average P/E of 9.34. Over the last 12 months, DAL's Forward P/E has been as high as 11.59 and as low as 7.79, with a median of 8.66.

DAL is also sporting a PEG ratio of 0.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DAL's PEG compares to its industry's average PEG of 0.77. DAL's PEG has been as high as 2.03 and as low as 0.39, with a median of 0.57, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Delta Air Lines is likely undervalued currently. And when considering the strength of its earnings outlook, DAL sticks out at as one of the market's strongest value stocks.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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