EFTA Document EFTA01447934

From: Sent: To: CC: Paul Morris ; Vahe Stepanian Subject: Airlines stocks weak [C] Attachments: Delta.pdf; Airline Weekly 6.26.pdf; pic16377.gif; pic21776.gif Tazia Smith 7/2/2014 11:56:37 AM Classification: Confidential ; Nav Gupta Hi Rich - I'll let you decide whether you want to highlight to Jeffrey. Airline stocks are down today (American is off over 3% and Delta is down -4.75% right now). This is driven by Delta's traffic and margin commentary (see below). I spoke with our Airline analyst team and bottom line, they believe near-term pressure is an entry point for clients to buy for the long-term. They point to continuing improving business trends (even at the low-end of estimates, Delta's margins will be up 300bps (-14% vs. 11%) year over year), continued stock buy-backs, and continued additions back to indices etc as additional tailwinds for the shares. Jeffrey is clearly already long the AAL, which DB has a 12mo target of 545 on. DB likes DAL shares here with an implied —26% upside to their 548 target. I don't know that Jeffrey needs/wants to add to his airline exposure, but a similar risk reversal set up in DAL prices as follows: DAL spot ref 38.45 s DAL Jan15 38 put —3.70 B DAL Jan15 38 call —4.15 actually like just selling puts too: S DAL Jan15 37 puts —3.20 (collect —8% for 6mos, or create the stock at 33.80) And of course could do something with AAL on weakness too. All My Best, Tazia (See attached file: Delta.pdf)(See attached file: Airline weekly 6.26.pdf) Forwarded by Tazia Smitl on 07/02/2014 11:28 AM From: "Tazia Smith (DEUTSCHE ASSET MANAG)" To: undisclosed-recipients:;, Date: 07/02/2014 11:26 AM Subject: (BFw) Delta Sell-Off 'seems Aggressive' Given Margin Guidance: C (BFw) Delta sell-off 'seems Aggressive' Given Margin Guidance: C oven This has been prepared solely for informational purposes. It is not an offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. It is based on information generally available to the public from sources believed to be reliable. No representation is made that it is accurate or complete or that any returns indicated will be achieved. changes to assumptions may have a material impact on any returns detailed. Past performance is not indicative of future returns. Price and availability are subject to change without notice. Additional information is available upon request. CONFIDENTIAL — PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0 102728 CONFIDENTIAL SDNY_GM_00248912 EFTA01447934