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A Light At The End Of The Runway For Delta Air Lines

A Light At The End Of The Runway For Delta Air Lines
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While Delta Air Lines, Inc. (NYSE: DAL) has had a particularly rough 2016, there may be some light at the end of the runway due to some improving metrics, according to a new analyst note from Imperial Capital.

After experiencing seven consecutive quarters of passenger revenue per available seat mile (PRASM), new catalysts are suggesting that Delta could eventually turn this streak around and achieve positive unit revenue growth in upcoming quarters.

According to Imperial Capital analysts, key factors for Delta include higher jet fuel prices, capacity discipline and improving fares on domestic close-in bookings over the last six to eight weeks.

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The analysts feel that Domestic PRASM is expected to "improve sequentially beginning in 4Q16, turn flattish by 1Q17, and modestly positive for FY17 against easy comparisons." PRASM is expected to decline 0.5 percent in FY17 up from a previous estimate of 1.5 percent.

Imperial Capital lowered estimates on Delta on Higher Unit Costs but raised the price target on higher valuations due to improving unit revenue trends.

Imperial Capital maintains its In-Line rating on Delta Air Lines with a $44 price target, up from a previous $41.

At last check, Delta was up 0.4 percent at $40.17.

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Latest Ratings for DAL

Aug 2017Morgan StanleyMaintainsOverweight
Aug 2017BarclaysInitiates Coverage OnOverweight
Jul 2017Morgan StanleyMaintainsOverweight

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