Diamonds and Dogs

4/2/19

Delta Air Lines (DAL) flying higher. Delta is jumping 4% after releasing better than expected March metrics while also raising first quarter guidance. Delta expects 7% top-line growth with margin expansion while also accelerating a $1 billion in share repurchases in the quarter. Delta remains on target for $2.5 billion buyback for the full year. The company also extended their contract with American Express to leverage their co-brands.

Walgreens Boots Alliance (WBA) not helping the Dow. The U.S.'s biggest standalone drugstore chain is down 11% to a five year low after missing earnings estimates and guiding 2019 earnings below consensus. Walgreens now expects no earnings growth for 2019 verse previous guidance of 7 to 12% growth. Three factors are contributing to the underperformance including increased reimbursement pressure, volume as same-store growth in US is trending below plan and consumer conditions in UK remain challenging. In mid-2018, Walgreens replaced GE in the Dow Jones. Not the best move for the Dow Jones.