Deutsche Bank Reiterates On Delta Air Lines

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Deutsche Bank commented on Delta Air Lines, Inc. DAL following its Q4 earnings results. The firm reiterated its Buy rating and $60 price target.


Analyst Michael Linenberg noted that “Delta reported a 87 percent increase in Dec Q pretax income to $1 bb, contributing to a full year pretax profit of $4.5 bb.”

“In terms of its long-term goals, 2014 was a banner year for Delta. The company produced a 13.1 percent operating margin (ex-specials) vs. its 11-14 percent goal, 70 percent pretax EPS growth vs. 10-15 percent, $3.7 bb vs. $3 bb, and a 20.7 percent ROIC vs. its 15 percent to 18 percent goal,” according to Linenberg.

The analyst note indicated that “strong cash flow generation drove a $2.1 bb decrease in its net debt to $7.3 bb and allowed the company to return $1.35 bb to its shareholders. Given Delta's laser focus on profitability and hitting its return targets, we expect 2014's momentum to continue into 2015.”

The firm raised its FY 2014 EPS forecast from $4.35 to $4.40 (vs. consensus of $4.88) and maintained its 2016 EPS forecast of $4.60 (vs. consensus of $5.41).

Delta Air Lines, Inc closed at $49.17 Tuesday, up 7.26 percent.

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Posted In: Analyst ColorReiterationAnalyst RatingsDeutsche BankMichael Linenberg
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