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Barclays initiated coverage of Delta Air Lines Inc. (DAL) - Get Delta Air Lines, Inc. Report with an overweight rating, saying the carrier not only has the largest share of connecting passengers among the big four airlines but has also mapped out a unique international strategy.

Delta's outsized Atlanta hub, the largest single carrier hub in the world, plays a big role, said Barclays analyst Brandon Oglenski, who noted that it accounts for 10% of the carrier's revenue.

"Many would suggest that Delta's large share of the Atlanta market and ability to connect numerous southeast U.S. cities to the carrier's network drives disproportionate profitability relative to other smaller and more competitive hub operations at competitors" American Airlines Group Inc. (AAL) - Get American Airlines Group, Inc. Report and United Continental Holdings Inc. (UAL) - Get United Airlines Holdings, Inc. Report Oglenski wrote in the report, issued Thursday.

"We give Delta tremendous credit" for leading the airline industry with "a culture driven by respect for customers and employees blended with shrewd capital management," he said.

While regretting management's reduction of margin targets to 16% to 18% from 17% to 19% as well as Delta's large pension liability, Oglenski said, "Given Delta's leadership position in a sector we view as affording investors deep value, we are hard pressed not to have a large representation of Delta shares in the portfolio."

Delta trades at just eight times his estimated 2018 earnings, Oglenski said. He set an $80 price target.

In mid-morning trading, shares were down 50% to $49.41. Shares are flat year-to-date.

Among the four leading U.S. airlines, Delta has the largest percentage of connecting passengers as opposed to non-stop passengers, Oglenski said. Domestic connecting passengers account for 49% of Delta revenue, compared with 46% at American, 41% at United and 26% at Southwest Airlines Co.

He said the high proportion of connections may have driven Delta's early leadership in improving operations and minimizing delays and cancellations. Also, the emphasis on connections allows Delta "to serve smaller cities to drive flight density and {to} offer a larger selection of destinations from markets that might otherwise not receive direct air service.

"However, connecting flights also bring operational and cost challenges for an airline, as people, baggage, aircraft and crews are required to meet strict scheduled connection times," he said.

After Atlanta, Delta's leading hubs for revenue share are New York's John F. Kennedy International Airport with 9%, while Detroit and Minneapolis each provide 5% to 6%.

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Atlanta produces $22.7 million in daily domestic revenue for Delta, the highest for any hub. Runners-up are American hubs in Dallas and Charlotte with $15.4 million and $11.1 million, respectively, and United's Chicago hub with $9.7 million. Oglenski used Department of Transportation data to compile the numbers.

While "we think the size and power of the Atlanta hub likely supports some margin outperformance for Delta, we would also point to a strong operational culture that likely supports favorable cost outcomes for the inherently more complex connecting hub operation," he said.

As for international, Oglenski noted that Delta "has expanded its international network through strategic joint ventures and meaningful equity stakes in foreign carriers.

"Compared to its network competitors United and American, Delta's investments abroad have been much more meaningful in terms of value and signal an active approach to managing global partnerships," he said.

On Delta's second-quarter earnings call, CEO Ed Bastian commented on the strategy, saying, "What we have seen is our ability to drive value is much greater once you get inside the boardroom."

Delta has invested in minority ownership stakes of Aeromexico, GOL and Virgin Atlantic. Last month, Delta said it would buy 10% of Air France-KLM.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.