Delta investors wanted to see positive RASM guidance, says Deutsche Bank

Deutsche Bank says Delta’s September-end quarter adjusted EPS of $1.50 was in line with the firm’s forecast of $1.50 and “essentially in line with Bloomberg consensus,” though December-end quarter guidance translates to an adjusted EPS of $1.60-$1.85, versus the firm’s forecast of $1.78 and Bloomberg consensus mean EPS of $1.75. The firm thinks investors wanted to see a positive RASM guide, which is likely why the stock was down during pre-market trading, but adds that management noted a 1 point RASM “hit” due to the election and argues that “more importantly,” Delta is guiding to a a margin that is about 200 basis points wider than a year ago and EPS growth of more than 30%. The firm has a Buy rating and $60 price target on Delta shares, which are fractionally lower at $50.70 near 11 am ET.