DAL

Delta Air Lines ($DAL) Director Buys $200K in Shares Amid Tariff Uncertainty and Stock Plunge

04/15/2025 03:17

Delta Air Lines ($DAL) director Greg Creed has made a significant stock purchase following the airline's sharp share price decline. According to a Securities and Exchange Commission filing, Creed acquired 5,000 shares at an average price of $41.84 per share on April 10th, representing a total investment of $209,200. This purchase comes as Delta's stock has experienced a steep decline in recent months. The share price has fallen from a 52-week high of around $68 in January 2025 to as low as $35 in early April, representing a drop of approximately 48% and more than 33% year-to-date. Most U.S. airline stocks have been declining amid economic uncertainty and travel demand concerns following President Trump's tariff policy announcements. Greg Creed is an influential corporate executive who previously served as CEO of Yum! Brands and was instrumental in building Taco Bell into a global brand. His management experience and expertise in consumer behavior have been valuable to Delta's customer experience and marketing strategies. Creed has served on Delta's board since 2019, and his purchase decision signals confidence in the company's long-term value. Notably, this insider purchase occurred shortly after Delta Air Lines withdrew its annual financial guidance due to economic uncertainty. In early April, the airline cited the impact of trade tensions following President Trump's tariff announcements on travel demand as the reason for withholding its full-year 2025 outlook. Additionally, J.P. Morgan raised its recession forecast for the U.S. and global economies to 60%, heightening concerns across the airline industry. Creed's purchase stands in contrast to recent trading patterns of other Delta insiders. Over the past six months, most of Delta's executives have been selling shares. CEO Edward Bastian sold 91,710 shares at $69.85 for approximately $6.4 million on January 22, 2025, while President Glen Hauenstein sold a total of 115,000 shares for about $6.9 million in early November 2024. Various EVPs and other officers also executed multiple sales transactions between October 2024 and February 2025. This contrasting pattern is noteworthy. While senior executives sold during the stock's rise from Q4 2024 to early 2025, board member Creed chose to buy after the significant price drop. This may reflect insider confidence in Delta's long-term fundamentals despite short-term market volatility. Looking at Delta's financial position, the airline reported operating revenue of $14.0 billion for Q1 2025, up 3.3% year-over-year, with operating income of $569 million and an operating margin of 4.0%. The company maintained operating cash flow of $2.4 billion and free cash flow of $1.3 billion. The P/E ratio (TTM) stands at 7.15, which is below the airline industry average. The airline industry is facing several challenges currently. Virgin Atlantic recently reported slowing demand for travel from the U.S. to the UK, while Frontier Airlines withdrew its annual forecast due to weakening travel demand linked to the trade war. Delta also suffered a $500 million loss from a major IT outage caused by a CrowdStrike software malfunction in July 2024 and is pursuing legal claims related to this incident. On the positive side, Delta has decided to resume flights between New York and Tel Aviv starting April 1, 2025. Additionally, Fitch upgraded Delta's credit rating from 'BB+' to investment grade 'BBB-' in July 2024, reflecting significant improvements in its balance sheet over the past three years. Aviation industry experts maintain cautiously optimistic views on Delta. Barclays recently raised its price target on the airline by $8 to $60, noting that its Q4 outlook indicates an improving industry backdrop. However, concerns remain about potential revenue impacts from the U.S. presidential election. Investors should note that while U.S. markets rebounded following President Trump's announcement of a 90-day tariff pause on April 9th, with the S&P 500 recording its largest one-day percentage gain since 2008, airline stocks remain below pre-tariff announcement levels, indicating ongoing uncertainty about long-term implications. Greg Creed's purchase of $DAL shares represents a significant vote of confidence from an insider following the stock's decline. However, investors should approach with caution, considering the ongoing economic uncertainty and volatility in travel demand.

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