These 3 airlines are expected to suffer the most from a growing trade dispute, according to an analyst

The actions of the three major airlines fell on Tuesday after Deutsche Bank downgraded them, citing concerns over heightened geopolitical risks, compounded by the growing trade dispute.

Stock of Delta Air Lines Inc.

DAL, -2.28%

lost 2.3%, shares of American Airlines Group Inc.

AAL, -1.59%

fell 1.6% and the shares of United Continental Holding Inc.

UAL, -1.07%

dropped 1.1%. Analyst Michael Linenberg reduced his ratings on all three airlines and reduced his price target on Delta to $ 53 from $ 54, $ 43 against $ 60 and $ 74 against $ 81. The current trade dispute between the United States and its global partners could become more important to the front line of the industry given its close correlation with imports and exports of goods and services, "Linenberg writes in a note. to customers. "In addition, the growing trade dispute could cause American companies to reconsider their work and job plans, which would have a negative impact on business trips."

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According to him, large carriers are more exposed to trade-related headwinds. high proportion of business travelers. While valuations remain attractive and balance sheets are relatively healthy, he does not see enough reasons to recommend investing the "new currency" in equities.

Despite the massive sale of Big 3 shares, the general sector has gained ground. with the NYSE Arca Airline Index

XAL, + 0.22%

edged up 0.1%, while the S & P 500 index

SPX, -0.49%

slipped 0.5%

Linenberg said that in the current macroeconomic and geopolitical context, he believes that the actions of the airlines most likely to outperform the market are those of domestic carriers. , especially those with various initiatives in place to improve earnings regardless of the macro backdrop.

Its favorite airlines, in order of preference, are Southwest Airlines Co.

VLU, -0.04%

Spirit Airlines Inc.

SAVE, -0.16%

Alaska Air Group Inc.

ALK, + 0.80%

and JetBlue Airways Corp.

JBLU, + 0.10%

who all have purchase ratings

Yet, given the risk of "collateral damage" from the growing trade conflict, Linenberg has reduced his goal of course on Southwest at $ 62 versus $ 66, on Spirit at $ 51 from $ 54, on Alaska Air at $ 74 starting at $ 80 and on JetBlue at $ 23 starting at $ 25

L & # 39 NYSE index Arca Airline has lost 15% since the beginning of the year.

DJT, -0.78%

which includes six airlines, lost 2.3%. The S & P 500 index

SPX, -0.49%

gained 1.5% this year.