Deutsche Bank Initiates Coverage On Virgin America, Calls It 'A Unique Low Cost Carrier'

Michael Linenberg of Deutsche Bank initiated coverage of

on Wednesday with a Buy rating and $44 price target as shares are an “attractive” way to gain exposure to the U.S. domestic market. According to Linenberg, Virgin America offers investors a compelling story as it is a low-cost carrier pursuing a unique strategy of targeting price-sensitive business travelers and high-end leisure customers that want to travel with a “hip, high-tech, high-touch travel experience.” Linenberg notes that Virgin America offers lower prices relative to its peers for its three class product by flying a single aircraft type, high-asset utilization while outsourcing all functions that are non-passenger facing such as baggage delivery. The analyst adds that given the company's size it "doesn't take much to move the needle" with respect to growth.