Is the Decline in Airline Stocks Following the Iran Attacks Warranted?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Marketbeat
Impact of War on Airline Stocks: The ongoing war in Iran has led to significant declines in airline stocks, with major carriers like Delta and American Airlines experiencing drops of approximately 22% and 27%, respectively, in the last month due to rising fuel costs and geopolitical instability.
Investment Opportunities Amid Declines: Despite the downturn, some investors see potential opportunities to strengthen positions in the airline industry, although caution is advised due to the uncertain impact of the war and fluctuating oil prices.
Challenges Faced by Airlines: Airlines are grappling with multiple negative factors, including canceled flights and increased operational costs, which have compounded the financial strain since the onset of the conflict.
Future Outlook for Airline Stocks: Analysts suggest that the long-term effects of the war and rising fuel prices may continue to challenge the airline industry, with some investors opting to wait for more favorable conditions before making new investments.
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Analyst Views on DAL
Wall Street analysts forecast DAL stock price to rise
18 Analyst Rating
18 Buy
0 Hold
0 Sell
Strong Buy
Current: 59.270
Low
77.00
Averages
83.50
High
90.00
Current: 59.270
Low
77.00
Averages
83.50
High
90.00
About DAL
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company has hubs and markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Santiago (Chile), Sao Paulo, Seattle, Seoul-Incheon, and Tokyo. Its segments include Airline and Refinery. Its airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and includes its loyalty program, as well as other ancillary businesses. Its refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel as well as non-jet fuel products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Surge in Energy Prices: The war in Iran has caused global oil prices to spike, with Brent crude rising from about $70 to $119.50 per barrel, while average gasoline prices hit $3.50 per gallon, a 19% increase in just two weeks, exacerbating economic pressures on consumers.
- Uncertain Long-term Impact: Economists predict that if the conflict persists, oil prices could average around $100 per barrel in 2026, potentially pushing CPI inflation to 3.5%, complicating the Federal Reserve's interest rate policy and increasing market uncertainty.
- Significant Tariff Effects: Prior to the Iran conflict, tariffs imposed by the Trump administration were a major inflation driver, with the current effective tariff rate at 10.5%, the highest since 1943, leading economists to believe that consumers will struggle to find relief from inflation in the short term.
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- Market Outlook: With expectations of declining interest rates, investors may increasingly favor long-term bonds, and Gallagher's buying strategy could yield capital returns in a falling rate environment, enhancing the potential for future gains.
See More
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- Value Appreciation: As of December 31, 2025, Gallagher's total position in VCLT reached 845,731 shares, valued at approximately $64 million, marking a $39.9 million increase from the previous quarter, indicating strong market response to the ETF.
- Asset Allocation Strategy: While significantly increasing its VCLT holdings, Gallagher also boosted its stock exposure through VTI and reduced positions in individual stocks like McDonald's, PG&E, and Delta Air Lines, showcasing its flexible asset allocation strategy.
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See More
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- Market Resilience: Despite the challenges, the damage to airline stocks may not be as severe as initially anticipated.
See More
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- Price Target Adjustment: TD Cowen lowered its price target for American Airlines from $17 to $13, which is only 17% above the current stock price, indicating worries about fuel cost volatility and demand weakness that could undermine investor confidence.
- Surge in Trading Volume: The trading volume reached 128.7 million shares, about 108% above the three-month average of 61.8 million shares, suggesting a significant increase in market attention towards the stock, likely due to investor uncertainty about its future trajectory.
- Industry Environment Challenges: American Airlines has seen its stock drop 27% over the past month, facing dual pressures from rising fuel prices and travel demand risks, with analysts generally agreeing that the lack of fuel hedging strategies will put greater strain on the company's finances.
See More
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- Customer Service Innovation: In 2025, Delta served over 200 million customers and was recognized by J.D. Power for achieving the highest satisfaction in Premium Economy, highlighting its ongoing commitment to enhancing customer experience.
- Flight Network Coverage: Operating up to 5,500 flights daily to over 300 destinations, Delta showcases its extensive global network and connectivity, reinforcing its leadership position in the airline industry.
- Industry Recognition: Delta was named the top U.S. airline by the Wall Street Journal and recognized as North America's most on-time airline by Cirium in 2025, reflecting its excellence in safety and reliability.
See More
