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Fly News Breaks for September 16, 2019
DAL, GOGO
Sep 16, 2019 | 08:26 EDT
Gogo (GOGO) shares on Friday increased for the 12th consecutive trading session, William Blair analyst Louie DiPalma tells investors in a research note titled "They Say Mentioning a No-Hitter in the Middle of a No-Hitter Is Bad Luck... Stay Tuned." The analyst believes the primary driver behind the recent stock movement is anticipation for Delta Air Lines' (DAL) planned rollout of free Wi-Fi, and the potential positive impact on Gogo's financials. Delta's rollout of free Wi-Fi will require Delta to break and amend its existing contract with Gogo that lasts until 2027, says DiPalma. The analyst points out that Delta's Twitter account tweeted on September 9: "Delta expanded its partnership with Gogo inflight (our Wi-Fi provider) for the launch of free Wi-Fi. In preparation, testing of 55 markets began in May. We are committed to delivering a product that will add continued value to your travel experience. Stay tuned!" DiPalma thinks it is possible that Delta CEO Ed Bastian provides more details at the September 18 SKIFT Global Forum in New York City. The analyst sees Gogo shares in 2021 appreciating to a range of $10 to $15, which corresponds to a free cash flow yield of 6.6% to 9.8%. He keeps an Outperform rating on the name.
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