U.S. Airlines Flying Back Onto Our Radar Screen; Delta Shares Undervalued and Remains Top Pick
We’ve reviewed the systematic and unsystematic risk profiles of the U.S. airlines we cover. These changes combined with adjustments to our forecasts result in fair value estimate increases for Southwest ($57 up from $52), Delta ($63 up from $61), and United ($85 up from $84), while American falls ($46 down from $47). Among the U.S. carriers we prefer Delta, and our lower uncertainty places shares deeper into 4-star territory. Still, we don’t think Delta or any other U.S. carrier warrants a moat,...Delta Air Lines provides scheduled air transportation for passengers and cargo. The company serves the Transatlantic, Transpacific and Latin America markets directly on the company and through joint ventures with airline partners. Internationally, the company has hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon. These arrangements are commercial joint ventures that include joint sales and marketing coordination, co-location of airport facilities and other commercial cooperation arrangements. The company has other businesses arising from its airline operations, including providing maintenance and engineering support for its regional aircraft.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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