A Delta Air Lines Boeing 737-800 plane arrives in Salt Lake City, Utah, U.S., January 12, 2018. REUTERS/Mike Blake
(Reuters) – Delta Air Lines Inc stock could jump into the mid-$60s per share from around $50 now if it can hit its earnings target of $6 to $7 a share this year, up from $5.65 in 2018, according to an analyst in a Barron’s article on Sunday.
Atlanta-based Delta is “the leader in fare segmentation, international alliances, and technology, as well as maintenance and repair,” Ross Margolies, who heads Stelliam Investment Management, said in the article.
The article noted rumors that Warren Buffett’s Berkshire Hathaway Inc could be interested in buying an airline, noting Berkshire already owned about 10 percent of each of the four major U.S. carriers: Delta, Southwest Airlines Co, United Continental Holdings inc, and American Airlines Group Inc.
The article said that “Buffett appears to be most enamored” with Delta. In a filing on Friday, Berkshire disclosed it recently lifted its stake in Delta by 5.4 million shares and now holds 70.9 million shares, a 10.4 percent stake.
Officials at Delta said the company did not have any comment on the Barron’s article beyond Delta Chief Executive Ed Bastian’s quotes in the story.
Bastian told Barron’s that “investors want to see our margins expand.” Delta aims to boost margins this year and increase earnings per share by 15 percent, he said.
As for the potential Berkshire Hathaway interest, Bastian said: “We’re open for sale every day of the year. We think the future is bright and our valuation is cheap.”
Reporting by Scott DiSavino in New York; Editing by Marguerita Choy and Peter Cooney