Deutsche Bank Expects Strong December Quarter For Delta Air Lines

In a report published Thursday, Deutsche Bank analyst Michael Linenberg reiterated a Buy rating and $48.00 price target on

. In the report, Deutsche Bank noted, “Delta reported Sep Q diluted EPS of $1.20 exceeding our forecast of $1.15 and the consensus of $1.18. A year ago Delta reported diluted EPS $1.41, however, underlying last year's result was the absence of book taxes whereas in the current quarter Delta booked a 38% tax rate. Total revenue was $11.2 billion, about $100 million better than our forecast, and represented a 6.5% increase versus a year ago. Passenger unit revenue (PRASM) increased 2.4% (in line with our forecast) with the majority of the increase driven by higher yields which increased 1.9%. Other and cargo revenue came in better than our forecast. Unit costs ex-fuel, profit-sharing and specials increased a modest 0.3% as Delta targets non-fuel cost growth of no more than 2%. Overall, the company reported a 15.8% operating margin which was 260 basis points better than a year ago.” Delta Air Lines closed on Wednesday at $32.38.