2023-06-28 07:50:42 ET
Morgan Stanley called Delta Airlines ( NYSE: DAL ) its top pick in the airline sector after walking away from the Atlanta-based company's Investor Day event impressed.
Analyst Ravi Shanker said the event helped to show Delta Air Lines ( DAL ) is on a path to restoring operational reliability and financial metrics to pre-pandemic or even all-time high levels, including completion factor, on time rates, and margin rates. Shanker thinks that they could help sway investor perceptions of Delta as a highly leveraged, legacy network airline. He also said that at a 5X to 6X PE range, the stock gets little credit for the operating and financial leadership displayed.
In terms of booking demand, Delta Air Lines ( DAL ) management continues to see a constructive industry backdrop, with pent up air travel not yet satisfied. There was also a large focus on the premium Delta brand. Shanker highlighted that four of the seven sessions indicated how focused Delta ( DAL ) is on the customer experience and how much customers love the Delta brand. "This includes technology that offers customers personalized experiences, amenities like free Wi-Fi, getting in front of friction points, a fully synced experience across travel segments, and a large focus on sustainability." he noted.
Morgan Stanley has an Overweight rating on Delta Air Lines ( DAL ) and price target of $70.
Shares of Delta Air Lines ( DAL ) tracked 0.55% higher in premarket trading on Wednesday after rising 6.84% on Tuesday.
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Delta Air Lines is the top airline stock pick at Morgan Stanley