Delta Air Lines Inc. (NYSE: DAL) has been riding high on lower oil prices throughout the past year, and it looks like the airline will continue to do so, according to most analysts. This first quarter of 2015 has been a little turbulent, but some analysts are seeing clear skies ahead. The independent research firm Argus has decided to add Delta to its coverage universe with a relatively positive outlook, on the surface.

Argus launched its coverage of Delta with a Buy rating and a price target of $55, very positive with an upside of over 20%. However, compared to other analyst calls, this is one of the lowest price targets given.

The reason behind this rating is that Delta is benefiting from strong industry fundamentals, including low fuel costs, reduced industry capacity and rising demand for air travel. At the same time, Delta is also upgrading its fleet with new, fuel-efficient aircraft and expanding globally through partnerships with international carriers.

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Looking forward in 2015, Delta expects fuel costs of $2.25 to $2.35 per gallon, down $0.50 to $0.60 a gallon from actual costs in 2014. The lower costs should save more than $2 billion this year.

According to the Argus report:

To help boost revenue, the company has replaced first-class and coach seating with five new tiers of seats, and begun to offer flatbed seating on long-haul flights. It is also providing customers with additional amenities, ranging from Starbucks coffee to Wi-Fi. It currently plans to spend $750 million over the next two years to provide Wi-Fi service on its planes. In addition, it will renovate the interiors of its narrow-bodied aircraft, which should extend the life of its fleet and reduce capital expenditures.

The operating margin is expected to improve over the next two years, and Argus set its earnings estimates at $5.00 per share for 2015 and $5.95 for 2016. The firm’s five-year earnings growth rate forecast is 20%.

In 2014, Delta returned $1.35 billion to shareholders through dividends ($251 million) and stock buybacks ($1.1 billion). It currently has a $2 billion share repurchase authorization, which it expects to complete by the end of 2016.

The highest price target from analysts is $80.50, implying upside of 77% from current prices.

Delta has seen its stock rise over 32% in the past 52 weeks, but so far this year the stock has dropped roughly 8.6%.

Shares of Delta were up 1.5% at $45.53 in Monday morning trading. The stock has a consensus analyst price target of $64.09 and a 52-week trading range of $30.12 to $51.06.

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