Fulcrum downgrades Delta Air Lines (DAL) to neutral from buy.
Analyst Susan Donofrio downgrades based on risk of bankruptcy heightening. She cites stubbornly high fuel prices and the potential for further cash needs due to her expectation of some amount of required cash collateral for Delta's credit-card processing deals that expire in August 2005.
She also cites a weak domestic revenue environment, especially on the East Coast and low international exposure relative to other legacy carriers (who average 38% exposure).
Donofrio cuts her $13 12-month target to $4 based on higher fuel prices and upcoming liquidity challenges. She think the sale of its ASA and Comair units are unlikely to obtain full market value.