Delta Air Lines is better positioned than many of its U.S. and European peers as the global economy continues its recovery from the pandemic, according to investment firm Berenberg. Analyst Conor Dwyer upgraded the stock to buy from hold, saying in a note to clients on Monday night that the stock was one of its top picks among airlines. "Delta offers a high-quality way to play the US recovery, with shares trading at a discount to history; we expect the company to regain its margin premium versus the rest of the sector. Delta's co-branded credit card deal with American Express will be key to this, offering resilient growth at a high margin," Dwyer wrote. After a sluggish recovery for airlines from the peak of economic shutdowns and travel restrictions, Delta is now getting closer to normal, Berenberg said. "We expect Delta's pre-tax margins to recover to pre-pandemic levels during 2023E-2024E, in part thanks to solid pricing restoration; we also think it is less vulnerable to weak business travel demand than peers such as United," the note said. Berenberg raised its price target to $50 per share from $48. The target represents upside of nearly 32% from where the stock closed on Monday. Shares of Delta are down 3% in January, holding up better than the broader market but underperforming the U.S. Global Jets ETF. — CNBC's Michael Bloom contributed to this report.
Delta Air Lines airplanes at the Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, on Tuesday, Dec. 21, 2021.