Delta Air Lines (DAL) PT Raised to $60 at Barclays
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Barclays analyst Brandon Oglenski raised the price target on Delta Air Lines (NYSE: DAL) to $60.00 (from $52.00) while maintaining a Overweight rating.
The analyst comments "Where we stand: While the initial reaction to Delta’s guidance for a slight reduction in 4Q unit revenue was met with disappointment as investors expected positive outcomes given lower industry capacity growth, management’s discussion of observed weakness on and around the upcoming US elections seems to have assuaged most fears. Management highlighted a material pullback in bookings heading into the week prior and post-election day, attributing nearly a point of revenue headwind during the fourth quarter. At the midpoint of management capacity and revenue guidance, total unit revenues would be down 50bps during the fourth quarter, which would have presumably been positive ex-election day impact. We understand it is hard to connect the election day with reduced travel behavior (especially with absentee ballots), but we defer to those running one of the US’s largest airlines and observing real-time booking trends. Beyond the election impact, management was upbeat on trans-Atlantic unit revenue trends in the fourth quarter which are likely to be positive along with expected improvement in shorthaul Latin beach markets, which had been over-supplied by the industry earlier this year. The company’s guidance for roughly 3% non-fuel unit cost inflation was mostly in line with prior expectations, thus resulting in earnings and margin guidance for the fourth quarter above prior year levels. On longer-term issues, management mostly deferred questions to the company’s upcoming analyst meeting in November."