Delta Strengths And Weaknesses

Decent Essays

Q3 - OE_Strengths
What do you see as Delta’s particular strengths?
"Their approach to segmenting the market. They have a better understanding of how to monetize or get more money out of travelers' wallets for the service that they provide. They run a very good operation. Balance sheet, financial discipline."
Q4 - OE_Weaknesses
What do you see as Delta’s particular weaknesses?
"The primary weakness as an investment is that it's in an industry that investors are still learning to understand, and as a result, there's going to be a tremendous amount of volatility in the stock. From a company perspective, not really. They may be on the verge of under-investing a little bit relative to peers. We're going to have newer fleets, but that's just …show more content…

"We have outperform ratings on Southwest and Delta, and market perform ratings on American and United."
Q12b - OE_PreferredInvestmentWhy
Why do you say that? [Reasons for preferred investment]
"Southwest and Delta. Southwest has a differentiated business model and is able to offer a better service at a lower cost across the markets it serves, allowing it to sustain a higher level rate of return. Delta has a better network than the other network carriers American and United, and has a better understanding of how to maximize the revenue potential within the cabins and the service it's flying."
Why did you give that rating? [Reasons for overall opinion of the airline industry as an investment opportunity]
"4 [6-pt scale]. The fundamentals are underestimated. The earnings power of the industry through the cycle is underestimated. But you do have a lot of cyclical risk toward the end, so it makes a little bit less of a 5 or a 6. You've also seen the stocks run for the last five, six months. As a result of that run, you've lost some of the potential for significant outperformance. There's still potential for outperformance but it's not as significant as it was five months

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