Barclays on U.S. Airlines: Robust Outlook Remains; Upgrade LCC on Weakness, Favorable Capacity Dynamics
Tweet
Share
E-mailGet Alerts UAL Hot Sheet
Price: $53.51 +1.59%
Rating Summary:
20 Buy, 12 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
20 Buy, 12 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Join SI Premium – FREE
Barclays on U.S. Airlines: Robust Outlook Remains; Upgrade LCC on Weakness, Favorable Capacity Dynamics
Barclays analyst, Gary Chase, said, "Industry dynamics continue to improve while sentiment languishes. We think investors with longer time horizons should exploit this opportunity in United (NYSE: UAL), Delta (NYSE: DAL), and U.S. Airways (NYSE: LCC) (upgraded with this note): Revenue trends remain solid and, in our view, portend a robust earnings picture for 2012 despite recently higher fuel prices. Of course, risks remain, but that's airlines. While unlikely to create material near-term tailwinds, we believe the bankruptcy of AMR Corp (NYSE: AMR) and likely associated labor cost reductions are a powerful reinforcement of the cost convergence that we believe is driving the industry's capacity discipline."
"Fuel higher again: Fuel prices have edged up a bit during 4Q and more substantially for 2012. Our new 2012 estimates contemplate $98/bbl for crude and $30/bbl for crack."
"After a tough year, time to revisit LCC: We still like UAL and DAL, but also think it's time to re-visit LCC shares, which have substantially underperformed this year. The market seems indifferent to industry improvement, but we don't expect that indifference to last. LCC has leverage to industry improvement, but also has favorable company-specific capacity dynamics as a tailwind. With this report, we upgrade the shares from EW to OW."
Barclays raises its rating on LCC to Overweight, but lowers PT by $1 to $10, raises FY12 EPS estimate from $0.15 to $0.39 and FY13 from $1.50 to $1.75.
Barclays maintains EW on Alaska Air (NYSE: ALK), raises PT from $91 to $95, raises FY EPS estimate from $7.71 to $8.06 and next yr from $9.80 to $10.40.
Maintains OW rating on DAL, cut PT by $1 to $14, raises FY EPS estimate from $1.18 to $1.26 and next year from $2.50 to $2.60.
Maintains an EW rating on Southwest (NYSE: LUV), lowers PT by $1 to $10 and raises FY EPS estimate from $0.36 to $0.40.
Maintains an OW rating on Spirit (Nasdaq: SAVE), raises PT $1 to $18.
Maintains on OW rating on UAL, lowers PT from $32 to $30, raises FY EPS estimate from $3.44 to $3.67.
Maintains an EW rating on JetBlue (Nasdaq: JBLU), raises FY EPS estimate from $0.17 to $0.19
Barclays analyst, Gary Chase, said, "Industry dynamics continue to improve while sentiment languishes. We think investors with longer time horizons should exploit this opportunity in United (NYSE: UAL), Delta (NYSE: DAL), and U.S. Airways (NYSE: LCC) (upgraded with this note): Revenue trends remain solid and, in our view, portend a robust earnings picture for 2012 despite recently higher fuel prices. Of course, risks remain, but that's airlines. While unlikely to create material near-term tailwinds, we believe the bankruptcy of AMR Corp (NYSE: AMR) and likely associated labor cost reductions are a powerful reinforcement of the cost convergence that we believe is driving the industry's capacity discipline."
"Fuel higher again: Fuel prices have edged up a bit during 4Q and more substantially for 2012. Our new 2012 estimates contemplate $98/bbl for crude and $30/bbl for crack."
"After a tough year, time to revisit LCC: We still like UAL and DAL, but also think it's time to re-visit LCC shares, which have substantially underperformed this year. The market seems indifferent to industry improvement, but we don't expect that indifference to last. LCC has leverage to industry improvement, but also has favorable company-specific capacity dynamics as a tailwind. With this report, we upgrade the shares from EW to OW."
Barclays raises its rating on LCC to Overweight, but lowers PT by $1 to $10, raises FY12 EPS estimate from $0.15 to $0.39 and FY13 from $1.50 to $1.75.
Barclays maintains EW on Alaska Air (NYSE: ALK), raises PT from $91 to $95, raises FY EPS estimate from $7.71 to $8.06 and next yr from $9.80 to $10.40.
Maintains OW rating on DAL, cut PT by $1 to $14, raises FY EPS estimate from $1.18 to $1.26 and next year from $2.50 to $2.60.
Maintains an EW rating on Southwest (NYSE: LUV), lowers PT by $1 to $10 and raises FY EPS estimate from $0.36 to $0.40.
Maintains an OW rating on Spirit (Nasdaq: SAVE), raises PT $1 to $18.
Maintains on OW rating on UAL, lowers PT from $32 to $30, raises FY EPS estimate from $3.44 to $3.67.
Maintains an EW rating on JetBlue (Nasdaq: JBLU), raises FY EPS estimate from $0.17 to $0.19
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Gilead Sciences (GILD) Misses Q1 EPS by 288c
- Employers Holdings (EIG) Misses Q1 EPS by 2c
- Keefe, Bruyette & Woods Upgrades Trustmark (TRMK) to Outperform
Create E-mail Alert Related Categories
Analyst Comments, UpgradesRelated Entities
Barclays, Crude Oil, Bankruptcy, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
