Delta Air Lines price target raised to $85 from $77 at Morgan Stanley

Morgan Stanley raised the firm’s price target on Delta Air Lines (DAL) to $85 from $77 and keeps an Overweight rating on the shares. The firm also raised its “bull case valuation” for Delta shares to $110 from $90. The airline’s push into premium will allow the company to “outperform the rising tide of Airlines demand growth” and will be rewarded by investors in much the same way that Abercrombie & Fitch’s (ANF) recent reinvention as a more premium and relevant specialty retailer has been rewarded by investors, the analyst tells investors in a research note. Morgan Stanley says that in a bull case scenario where Delta’s valuation doubles, similar to Abercrombie, to 12-times price-to-earnings from less than 6-times today, the stock could be trading closer to $110 compared to $47 today.