Argus downgraded shares of Delta Air Lines to carry from buy, citing weaker-than-expected quarterly earnings and a less-than-stellar outlook. Shares of the Atlanta-based carrier have shed nearly 24% yr up to now through Thursday’s close. While Delta benefited from the rollback of Covid-19 travel restrictions and increased demand for international flights, it is also been hit by capability reductions and staffing shortages, analyst John Staszak wrote in a Thursday note. That showed up within the airline’s second-quarter earnings, released Wednesday, which revealed weaker-than-expected earnings per share. As well as, Delta projected only modest revenue growth within the third quarter. “We caution that airline stocks are volatile and suitable just for risk-tolerant investors,” wrote Staszak. Going forward, Argus expects Delta and other airlines will grapple with pressure from rising expenses, including the fee of jet fuel. At the identical time, ticket prices will likely level off as industry capability expands. Argus reduced its 2022 earnings per share estimate for Delta to $3.00 from $4.25 and lowered its 2023 estimate to $6.10 from $6.50, driven by prospects for increases in unit costs. There’s an upside likelihood that Delta could outperform, the firm said. “If unit costs are lower than we currently anticipate, we’d consider returning the stock to our buy list,” wrote Staszak. Other airlines are also being slashed by Wall Street. On Friday, Wolfe Research downgraded American Airlines to underperform from peer perform, given its high-end balance sheet leverage heading into an economic downturn.