US Airlines: Chart of the Day: ALGT and ULCC Stand Out on Falling Fuel Specifically

研报英文原文证据摘录

US Airlines: Chart of the Day: ALGT and ULCC Stand Out on Falling Fuel Specifically

e low-cost travel market. We highlight the following risks to our price target and rating: Network

carriers ‘basic economy’ products compressing the low-cost pricing model, pushing consumers back to the network carriers

due to better offerings and more advantageous loyalty rewards. Geopolitical issues and fuel shocks remain as a macro issue

that Allegiant, and all airlines, face.

If the impact on the company from any of these factors is greater than we expect, the shares could have difficulty reaching our

price target. On the other hand, if the impact is less than we expect, the shares could exceed our price target.

Delta Air Lines, Inc.

(DAL.N; US$84.07; 1; 15 Jun 26; 16:00)

Valuation

We derive our $79 base case price target for DAL using the average of multiple valuation methodologies. Specifically, we apply

a 6.2x EV/EBITDAR multiple to 2027 EBITDAR and we apply a 9.5x P/E multiple to 2027 EPS. These multiples are justified, in

our view, using historical valuation ranges in conjunction with trading relationships to fundamental factors such as margins,

returns, growth, and earnings momentum.

Risks

This stock is High Risk based upon our quantitative model but assigning a High Risk rating is not supported by other qualitative

factors such as demonstrated margin durability, credit risk, and liquidity profile vs. peers, and so a High Risk rating has not been

applied.

We note the following risks to the shares’ ability to reach our price target: competing legacy carriers mimicking cabin

segmentation, narrowing Delta’s differentiation, potential supply chain or certification delays with Airbus delaying Delta’s up-