The View (from 35,000 feet): Revising price targets on select airlines

Research evidence excerpt

The View (from 35,000 feet): Revising price targets on select airlines

Deutsche Bank

Research

North America Industry Date

United States 28 May 2026

The View (from

Industrials Forecast Change

Airlines 35,000 feet)

Revising price targets on select airlines

Michael Linenberg

Revising price targets on select airlines as recent share price rally starts to Research Analyst

discount an improved structural backdrop +1-212-250-9254

At several recent investor conferences, airlines continued to highlight strong

demand despite rising airfares to offset surging fuel prices. As such, we've seen Shannon Doherty

Research Analyst

airline share prices stage a strong rally taking stocks to levels, that in some cases

+1-212-250-5935

have exceeded our 12 month price targets. Given our positive view on the sector

(driven by multiple factors including the gradual removal of loss-making capacity) Angelina Zhao

and the fact that the geopolitical backdrop has modestly improved from several Research Associate

months ago, we believe that the risk to share prices for 2H 2026 is to the upside. +1-212-250-9398

Doug Runte, CFA

The air travel demand environment remains strong across the board. While fuel Research Analyst

prices remain elevated compared to pre-Iran conflict levels, the recent moderation +1-212-250-9319

(jet fuel is down 20% over the past month) provides a welcome tailwind, improving

profitability if airlines can hold onto yields. We think that they can as the airlines Key Changes

have demonstrated significant pricing power over the past few months while the Company Target Price Rating

supply backdrop remains very favorable. Furthermore, we estimate that the AAL.OQ 13.00 to 18.00 -

industry as a whole is successfully passing through about 50% of higher fuel costs DAL.N 80.00 to 90.00 -