Delta Air Lines: Investor day takeaways, PT raised at MS

Investing.com -- Delta Air Lines presented an ambitious vision at its 2024 Investor Day, leaving Wall Street analysts optimistic about the airline's competitive positioning and long-term growth potential.

The company is said to have outlined its 3-5 year targets, emphasizing premium revenue streams, robust free cash flow, and a focus on deleveraging.

Morgan Stanley (NYSE:MS ) highlighted Delta's differentiation from peers, noting its strong momentum in premium services, loyalty programs, and international expansion.

"Premium continues to be an important growth driver," analysts said, with loyalty programs expected to generate $10 billion annually, up from $7 billion.

This is said to position Delta for an "annuity business model," they added, comparing it to tech ecosystems like printers and smartphones.

Morgan Stanley raised its price target to $100, citing the airline's potential for a 10% EPS compound annual growth rate (CAGR) and free cash flow (FCF) growth hitting $5 billion annually.

Bank of America echoed the bullish sentiment, maintaining a Buy rating and a $72 price objective.

BofA analysts were encouraged by Delta's mid-teens operating margin targets and focus on fleet modernization, technology investments, and customer experience enhancements. They highlighted robust holiday demand and improving corporate bookings post-election, forecasting 2025 EPS at $7.34.

TD Cowen commended Delta's disciplined approach, emphasizing durable free cash flow that enables debt reduction and shareholder returns. The firm reiterated a $75 price target and Buy rating on the stock, noting Delta's ability to outpace non-fuel unit costs with premium-focused revenue growth.

Delta's leadership projects its differentiated strategy will generate long-term resilience, despite cyclical industry risks.

Analysts widely agree the company's plans, including a focus on premium cabins and deleveraging, set a strong foundation for growth.

Source: Investing.com