While shares of Delta Air Lines Inc. (DAL) have lagged those of its two main competitors -- United Continental Holdings Inc. (UAL) and American Airlines Group Inc. (AAL) -- Barclays analysts believe that investors should buy the stock on the Atlanta-based carrier's clear “leadership position” in the industry.

Barclays analyst Brandon Oglenski and his team initiated coverage on DAL at overweight with a $70 price target on Thursday, representing a 41% upside from Wednesday's close. “We are hard pressed not to have a large representation of DAL shares in the portfolio,” wrote Barclays. Delta shares closed up Friday at $49.48, extending their 12-month gain to 36.1%; United stock gained 39.9% and American has increased 38.5% in that period.

The 'Largest, Safest and Most Profitable' Airline

“Leading is no easy task; as such we give Delta tremendous credit. A culture driven by respect for customers and employees blended with shrewd capital management has transformed Delta into one of the largest, safest and most profitable airlines in the world,” wrote Oglenski.

In light of Delta’s continued outperformance on margins, returns and free cash generation relative to its peers, Barclays suggests historical airline valuation has become less relevant for the company in particular, warranting a re-rating. Analysts foresee upside in Delta’s international strategy given significant growth in global air travel, as foreign markets now comprise about 30% of total revenues.

“Branded fares, loyalty programs, global alliances and capital discipline make for a bright future at Delta … Further, we sense the company is striving to build a true global brand identity in the long-ago commoditized​ airline sector, which we suspect will provide dividends for years to come.” (See also: American Airlines Tries to Make Travel Less Painful with IBM Cloud.)

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