UPDATE: Bernstein Upgrades Delta Air Lines (DAL) to Outperform, Sees Potential For Buybacks Or Dividends
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Bernstein upgraded Delta Air Lines (NYSE: DAL) from Market Perform to Outperform, price target of $61.00 (from $57.00)
Analyst David Vernon comments "With the economy poised to gather steam and the possibility that tax reform both stimulates economic activity (aka business travel) and puts more money in consumer wallets we recommend having some exposure to the more commercially oriented carriers. Delta fits within our framework for what can work within an extension of the cycle. While the conventional view seems to be that it can't get any better at DAL, we think the company has been a pioneer in revenue management and as this is all undiscovered country don’t feel comfortable putting a cap on margin potential in the short term. The company is also producing considerable free cash flow, and has the potential to generate $9bn in levered free cash flow over the next three years (equivalent to 25% of its market cap) should market conditions hold. As the company has been paying down debt, we would expect much of that cash to be returned to shareholders through buyback or dividends."
Shares of Delta Air Lines closed at $47.81 Friday.
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Related EntitiesSanford C. Bernstein, Dividend
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