The carrier's investor day presentation Thursday pushed shares up nearly 5%, leading the sector that day. Shortly after the opening bell on Friday, Delta shares were up 41 cents to $48.80. The stock has risen 78% this year.
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"The king of the jungle continues to roar," wrote Cowen & Co. analyst Helane Becker, in a report issued Friday.
At its presentation, Delta unveiled its 2015 expectations. It expects 2015 pretax profit to increase by 11% to at least $5 billion. It expects to save $1.7 billion on fuel price declines, even after $1.2 billion in hedging losses. It expects to complete a $2 billion share-buyback program. It expects to realize $250 million in new revenue from offering four fare categories.
Becker said the presentation confirmed that fares are unlikely to decline because of lower fuel costs. "We believe steady fares in a low jet fuel environment will drive meaningful margin expansion," she wrote. She increased her price target to $58 from $45.
Delta's stature in the industry is such that early this month Credit Suisse analyst Julie Yates wrote in a report that she would like to find "the world's next Delta.
"For many years the use of the words profits and U.S. airlines rarely appeared in the same sentence," Yates wrote on Dec. 2. "Today U..S airlines' earnings are leading the world in size and quality, which has exerted a remarkable impact on their stock prices. Delta Airlines has been the poster-child of this revolution."
Yates said her top picks to be the next Delta are United (UAL) , Japan Air Lines and IAG in the U.S., Asia and Europe.
Following Delta's investor day presentation, Yates raised her target price to $63 from $56. "Delta is the U.S. network carrier with the lowest risk profile and the most attractive free cash flow yield and shareholder returns," she wrote.
Meanwhile, Wolfe Research analyst Hunter Keay was a bit less impressed; his Delta rating remains at peer perform.
"As usual, Delta presenting a very compelling investment case for the stock," Keay wrote. "But we are unsure if investors will reward Delta for cost-driven EPS growth given lower costs are largely driven by fuel prices."
Keay foresees a 2015 passenger revenue per available seat mile (PRASM) decline of 2% to 3%. For the entire industry, JPMorgan analyst Jamie Baker expects a PRASM decline of 1.6% in 2015. The decline is not a problem, given falling costs.