Delta Air Lines Inc. (NYSE:DAL)

The financial ratios over the given periods reveal notable trends and fluctuations in valuation metrics.

Price to Earnings (P/E) Ratio

The P/E ratio shows a declining trend from 10.57 in 2017 to 7.94 in 2019, indicating a decrease in market valuation relative to earnings during that timeframe. Data for 2020 is missing, but in 2021 there is a significant spike to 96.74, which suggests either a sharp increase in share price, a decrease in earnings, or both, leading to a very high relative valuation in that year.

Price to Operating Profit (P/OP) Ratio

This ratio decreased slightly from 6.18 in 2017 to 5.72 in 2019, mirroring the P/E trend. There is no data for 2020; however, in 2021 the ratio increased substantially to 14.36, indicating a much higher market valuation in relation to operating profits compared to prior years. This increase, though less dramatic than the P/E ratio, still points to altered market perceptions or operational earnings impact.

Price to Sales (P/S) Ratio

Unlike the previous ratios, the P/S ratio exhibits a different pattern. From 0.92 in 2017, it declined slightly to 0.78 in 2018 and then rose marginally to 0.81 in 2019. In 2020, there was a notable increase to 1.62, almost doubling from the previous year, potentially reflecting a price increase or sales decrease during that year. In 2021, the ratio declined again to 0.91, returning close to levels seen prior to 2020.

Price to Book Value (P/BV) Ratio

The P/BV ratio steadily decreased from 2.72 in 2017 to 2.46 in 2019, implying a slight reduction in market valuation relative to book value. However, a dramatic jump occurred in 2020 to 18.01, suggesting a substantial increase in market price compared to book value, likely driven by extraordinary circumstances affecting either market perceptions or book value itself. The ratio then dropped significantly to 6.97 in 2021 but remained well above pre-2020 levels, indicating persistent changes in valuation norms or balance sheet items.

Overall, the data highlights a period of relative stability or modest decline in valuation multiples through 2019, followed by considerable volatility and sharp increases in 2020 and 2021. The notable spikes in valuation ratios during this latter period point to potential impacts from extraordinary events, possibly related to earnings volatility or market dynamics, substantially altering the financial profile and market perception of the company.

Share Price

The share price showed a moderate increase from US$53.46 at the end of 2017 to US$59.13 at the end of 2019. However, there was a noticeable decline in 2020 and 2021, reaching US$43.29 and US$42.33 respectively, indicating a downward trend in market valuation during this period.

Earnings per Share (EPS)

EPS rose steadily from US$5.06 in 2017 to a peak of US$7.45 in 2019, suggesting improving profitability. In 2020, EPS dropped sharply to a negative US$19.41, reflecting a significant loss. By 2021, EPS partially recovered to a positive but low US$0.44, indicating ongoing challenges in profitability.

Price-to-Earnings (P/E) Ratio

The P/E ratio decreased from 10.57 in 2017 to 7.94 in 2019, signifying an increase in earnings relative to share price or a more attractive valuation. Data is missing for 2020 due to negative earnings. In 2021, the P/E ratio spiked to 96.74, reflecting a low EPS combined with the share price, suggesting the market valuation was high relative to earnings during recovery.

Share Price Trend

The share price exhibited fluctuations over the analyzed period. Initially, it decreased slightly from $53.46 in 2017 to $51.08 in 2018, followed by an increase to $59.13 in 2019. However, there was a notable decline starting in 2020, dropping sharply to $43.29 and further to $42.33 in 2021. This reflects a downward trend in the latter years after a period of relative stability and growth.

Operating Profit Per Share

Operating profit per share showed variability, beginning at $8.65 in 2017 and then declining to $7.75 in 2018. It improved in 2019, reaching a peak of $10.34. In 2020, the operating profit per share turned negative, falling drastically to -$19.54, indicating significant operational challenges during that year. There was a recovery in 2021, with operating profit per share rising to $2.95, though still substantially below pre-2020 levels.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio decreased from 6.18 in 2017 to 5.72 in 2019, suggesting that the share price was relatively undervalued compared to operating profit in this period. There is no data available for 2020, likely due to the negative operating profit that year. In 2021, the P/OP ratio sharply increased to 14.36, reflecting the stark reduction in operating profit despite a relatively stable share price, indicating a higher valuation multiple or diminished earnings capacity.

Overall Observations

The data reveals that the company faced significant operational difficulties in 2020, which drastically impacted profitability and financial ratios. While the share price partially recovered from its 2020 drop, operating profitability remained subdued. The elevated P/OP ratio in 2021 points to an imbalance between price and earnings performance, highlighting market expectations or valuation pressures despite weakened operating results.

Share Price Trend

The share price experienced fluctuations over the five-year period. Initially, there was a slight decline from $53.46 in 2017 to $51.08 in 2018. This was followed by an increase to $59.13 in 2019. A significant downturn occurred in 2020, with the share price dropping to $43.29, likely reflecting external economic or industry challenges. In 2021, the share price decreased marginally to $42.33, indicating some stabilization but not recovery to pre-2020 levels.

Sales Per Share Performance

Sales per share showed consistent growth from 2017 through 2019, rising from $58.34 to $73.44. However, there was a substantial decline in 2020, falling sharply to $26.79, which correlates with the drop in share price during the same period. In 2021, sales per share partially rebounded to $46.72 but did not return to prior peak levels, reflecting a recovery phase that remains below the earlier trend.

Price-to-Sales (P/S) Ratio Analysis

The P/S ratio remained below 1.0 from 2017 through 2019, fluctuating between 0.78 and 0.92, indicating the market valued the company at less than its sales revenue per share during that time. In 2020, the ratio spiked sharply to 1.62, a notable increase likely due to the disproportionate fall in sales relative to share price or market expectations of future recovery. By 2021, the P/S ratio decreased to 0.91, suggesting a reversion towards valuation levels seen before 2020.

Overall Insights

The data indicates that 2020 was an exceptional year marked by a significant downturn in both market valuation and sales performance, likely caused by extraordinary factors affecting the industry or economy. While there is evidence of recovery in 2021, metrics have not yet returned to pre-2020 levels. The spike and subsequent decline in the P/S ratio highlight market uncertainties or adjustments in expectations during and after the downturn.

The analysis of the financial data over the five-year period reveals several notable patterns and shifts in key metrics.

Share Price

The share price experienced a moderate fluctuation from 2017 to 2019, rising from $53.46 to a peak of $59.13 in 2019. However, following this period, there was a significant decline in the market value, dropping sharply to $43.29 in 2020 and slightly decreasing further to $42.33 in 2021. This downward trend in share price during the last two years suggests external challenges or negative market sentiment impacting the stock.

Book Value per Share (BVPS)

The book value per share showed a gradual increase from $19.68 in 2017 to $23.99 in 2019, indicating a strengthening in the company's net asset value relative to outstanding shares during this timeframe. However, in 2020, the BVPS plummeted drastically to $2.40, reflecting potentially significant losses, asset impairments, or equity dilution. In 2021, a partial recovery is observable, with the BVPS rising to $6.07, yet it remains substantially below pre-2020 levels.

Price-to-Book Value (P/BV) Ratio

The P/BV ratio trends reflect considerable volatility. From 2017 to 2019, the ratio declined modestly from 2.72 to 2.46, suggesting a slight reduction in investor valuation relative to net asset book value. A drastic spike occurred in 2020, with the P/BV ratio soaring to 18.01, driven primarily by the collapse in book value per share while the share price, though reduced, did not contract proportionally. In 2021, the ratio decreased significantly to 6.97, aligning with the partial recovery in book value, yet still indicating a market valuation considerably higher than book value.

In summary, the data indicates stable financial fundamentals up to 2019, followed by a severe impact in 2020 likely linked to extraordinary circumstances affecting asset values and investor confidence. The partial rebound in 2021 points to some stabilization, although the valuation metrics remain inconsistent with the pre-2020 period, highlighting ongoing uncertainty or structural changes in the company's financial position and market perception.