At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In," we don't simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we track the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best...
Airline stocks nationwide soared in response to bullish remarks about one of their kin yesterday. Stifel Nicolaus upgraded shares of Delta Air Lines (NYSE:DAL) to "buy," helping spark a veritable buying frenzy on the Street. Delta itself gained 11% yesterday, and it's added another 8% worth of altitude so far today. Not bad for an upgrade, but nearly everyone else fared nearly as well -- and some, better:

  • United (NASDAQ:UAUA), for example, rose 7% yesterday, 6% more today.
  • American (NYSE:AMR) gained 6% and 12%.
  • Continental (NYSE:CAL) rose 8% Monday, and tacked on 10% more today.
  • But the highest flyer by far has been US Airways (NYSE:LCC), which gained 14% yesterday, and 5% more so far today, for a grand total of 21% more market cap than it had at the end of last week.

Let's go to the tape
On the one hand, investors' enthusiasm makes a lot of sense. After all, Stifel Nicolaus is one of the very best stockbrokers we track on CAPS. The banker gets nearly 56% of its picks right, and outperforms the S&P 500 by an incredible 7.5 percentage points per pick, on average. Recent winners have included picks both logical (D.R. Horton (NYSE:DHI) to underperform -- and it has), and counterintuitive (Seagate (NYSE:STX) -- and it has, too.)

But while I understand the logic behind "pin action," I have to say, Fools -- I think investors are overreacting just a wee bit this time. I mean, only one of these airline stocks got an upgrade. And when you read the actual buy thesis that Stifel appended to Delta, it really doesn't make much sense to be buying anything other than the exact stock Stifel told you to buy: "We don't know what the economy will look like at year end, and if premium traffic continues to decline at current levels we believe some airlines could face serious liquidity pressures. But we believe Delta is not among those airlines."

Excited yet?
So, hmm -- that doesn't sound so good. Turns out, the only reasons Stifel's optimistic about Delta are that: 

  1. It flies through the wreckage in its industry, and 
  2. If Stifel's right, then Delta could benefit from investors wanting to "buy the survivor" as everyone else falls.

"Everyone else" would be United, American, Continental, and US Air, in this scenario.

Foolish takeaway
So let's sum up:

  • First and foremost, Stifel doesn't have a clue how the economy will perform over the next six months (but neither does anyone else, nor do we).
  • Second, Stifel thinks airlines in general are facing a liquidity crisis.
  • Third and finally, the only airline Stifel really likes under this scenario is Delta.

Toss in the added bit of trivia that oil is the lifeblood of airlines, and that oil prices have doubled over the last five months or so, and in my Foolish opinion, we're looking at real turbulence ahead. Airline investors who let their enthusiasm get ahead of them could face real losses.

We've said it before, and it bears repeating: Beware of steel and airlines.

Fool contributor Rich Smith does not own any stock named above -- and per the Fool's black-gold standard disclosure policy, cannot trade in any such stock for at least 10 days after this article posts. That's just how we roll at the Fool.

You can find Rich on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 891 out of more than 135,000 members.