UBS assumed coverage of Delta Air Lines (DAL) with a Buy rating and $88 price target The firm says supply and demand balance is the most important driver of airline RASM growth and margin performance, and expects the downshifting of supply growth from 5%- 6% in the first half of 2024 to 1%-2% growth in the second half to support an improvement in supply and demand which translates to stronger RASM growth and improving margins in 2025, the analyst tells investors in a research note. UBS expects Delta to deliver attractive EPS growth while its high single digit pretax margins and healthy balance sheet mitigate risks to travel demand and from potential cost inflation.
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