U.S. Airlines Fly Back Onto Our Radar Screen
Undervalued Delta remains our top pick.
We’ve reviewed the systematic and unsystematic risk profiles of the U.S. airlines we cover. This combined with adjustments to our forecasts has resulted in fair value estimate increases for Southwest Airlines (LUV), Delta Air Lines (DAL), and United Continental (UAL) and a decrease for American Airlines (AAL).
Among the U.S. carriers, we prefer Delta, and our lower fair value uncertainty rating places the shares deeper into 4-star territory. Still, we don’t think Delta or any other U.S. carrier has an economic moat, as evidenced by the recent price wars plaguing the industry.
Chris Higgins does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.