Delta Strengths And Weaknesses

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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
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"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."
Q12d
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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