Rising geopolitical and macroeconomic risks are dampening the outlook for airline stocks that have already taken a beating over the past year. Deutsche Bank analyst Michael Linenberg, who was previously optimistic about American Airlines Group Inc. (AAL), Delta Air Lines Inc. (DAL), and United Continental Holdings Inc. (UAL), changed his ratings on all three from a buy to a hold and slashed their price targets, according to Barron’s.

Airline Stocks: Losing Altitude

   1-Year Performance
 American Airlines  - 27.2%
 Delta Air Lines  - 9.4%
 United Continental  - 8.8%
 S&P 500  + 13.8%

Prepare for Turbulence

Airlines tend to be riskier-than-average stocks, Lindberg noted, claiming that they are “high-beta stocks.” In the capital asset pricing model (CAPM), beta is a measure of systematic risk, and the market is assumed to have a beta of 1.0. Any stock with a beta greater than 1.0 is deemed to be more volatile, and hence, more risky than the overall market. When external-market factor risks rise, one can expect higher-than-average swings in the prices of higher-beta stocks. (See also: Airline Bounce Unlikely to Gain Traction).

The escalating global trade war is one such external factor that, while posing risks to the market in general, also poses specific risks to the airline industry. Airlines’ revenues are closely tied to imports and exports of goods and services, meaning that weakening international trade will not be good for either the top or bottom lines. Further, the introduction of tariffs may affect the capital spending and employment plans of U.S. corporations, which could reduce the amount of corporate travel.   

While announcements of more moderate supply growth in the airline industry does suggest a slight upside, Linenberg doesn’t see that factor coming into play until later in the year. He slashed his price target for American Airlines by 28% to $43, Delta by 17% to $53 and United by 9% to $74, according to Barron’s.

Consensus estimates for United point to 7.1% sales growth and 5.5% earnings growth for 2018. (See also: Airline Relative Underperformance Continues).

A Bit of Bullishness

But not all analysts are as bearish as Linenberg. Cowen & Co. analyst Helane Becker thinks that Delta is still a good buy, especially as the airline gets set to announce earnings later next week. Expecting the company to update its guidance and provide a new plan to deal with rising fuel costs, Becker recently reiterated her outperform rating and $67 price target, implying a 36% upside.

Notably, in comparison with the two other legacy airlines—American and United—she thinks Delta is the more profitable one.