The firm also lowered the price target on the stock to $61 from $62. The stock was trading at $54.44 per share Monday.
"As we look at our refreshed 2020 estimates, which are moderately below consensus and reflect pilot step-ups, higher oil, elevated supply growth (3-4% 2019/2020), and healthy LSD RASM, shares are trading closer to an appropriate multiple (of ~9x). This compares to history of 9-10x over the last several years and the group at ~8x, thus the airline is now better reflecting its premium margins and balance sheet relative to the long-run," Monday's note said.
Delta wasn't the only airline to receive attention in Morgan Stanley's note.
"Over the last 12-18 months, United has done a solid job of executing on its midcontinent strategy, which we foresee continuing as the competitive backdrop remains benign in a high-cost environment," Morgan Stanley's note said.
United shares were rising 0.8% to $82.31 on Monday.