Investing.com -- Citi told investors in separate notes Thursday that it has placed Delta Air Lines and SkyWest on 30-day upside catalyst watch, arguing that the recent macro shock and fuel volatility are now increasingly priced in for carriers with the least exposure to jet-fuel costs.

Analysts John Godyn and Max Lesnik revealed they are adding both stocks to a positive catalyst list because the fuel spike “is extremely likely to weigh on all airline EPS in the short-term,” but the two names stand out for their resilience.

For SkyWest, Citi said the company has “among the least sensitivity” to fuel-driven earnings swings because fuel is a complete pass-through for about 90% of its capacity under its contract-flying model.

The analysts also highlighted “recent indications of strong travel demand at the supermajors,” a share-repurchase program “unusual among airlines,” and a ~14% pre-tax margin in FY25 that cushions shocks.

With 55% of its fleet carrying no financing obligations, the company can also flex capacity if needed, Citi noted. The bank has a price target of $112 on the stock, implying a 23.3% total return.

Meanwhile, Citi believes Delta has “among the least sensitivity” to fuel volatility because ~75% of its fuel consumption is covered by its Trainer Refinery.

The analysts pointed to Delta’s industry-leading ~8.55% FY25 pre-tax margin, its profit-sharing mechanism that stabilises earnings, and Atlantic exposure that benefits from rerouted travel as Middle Eastern airports face disruptions. Citi’s price target of $87 implies a 47.1% return.