Imperial Capital analyst Bob McAdoo was out pounding the table on Delta Air Lines, Inc. (NYSE:DAL) Thursday, reiterating an Outperform rating and price target of $69, which represents a potential upside of 56% from where the stock is currently trading.
Mcadoo noted, “Some investors appear to be overly concerned with near term PRASM weakness as the result of a stronger U.S. dollar. However, this weakness is being more than offset by lower foreign currency expenses and significantly lower jet fuel costs. As a result we expect, and management commentary seems to confirm, that each quarter this year will represent new record operating results.”
Furthermore, “We expect management to continue to utilize cash from lower fuel to repurchase additional shares and continue to deleverage the balance sheet, both permanent changes to the airline’s capital structure. We believe these practices should eventually help Delta achieve investment grade status and close the trading gap with other high quality S&P Industrial companies. Our $69 price target is about 56% above the recent share price.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Bob Mcadoo has a total average return of 29.2% and a 74.5% success rate. Mcadoo has a 40.8% average return when recommending DAL, and is ranked #26 out of 3572 analysts.