Goldman Sachs Starts American Airlines (AAL) at Buy, Sees 26% Upside
- Aetna (AET) to Acquire Humana (HUM) for $37 Billion, or $230/Share
- Top 10 News for 6/29 - 7/2: Greece's Bark Bites Markets; Tesla's Q2 Sales Outpace; Major Insurance Merger Announced
- Yelp (YELP) Sale Process Said to Stall as CEO Changes Mind
- UPDATE: Nonfarm Payrolls Added 223K in June, Missing Views Amid Gains in Health Care, Retail Trade
- Kraft Heinz Co (KHC) Announces Completion of Merger; Updates on Next Steps; Announces Dividend
Goldman Sachs initiates coverage on American Airlines (NASDAQ: AAL) with a Buy rating and a price target of $46, suggesting 26% upside.
Analyst Tom Kim said, "In our view, the stock should outperform our airline coverage and the S&P500. The carrier’s margins are poised to expand 2.0 ppts over 2013-16E to 12.7%, which we expect to drive multiple expansion. Meanwhile, earnings growth should accelerate thanks to a favorable airline cycle, which we expect to facilitate AAL's integration initiatives more than the market anticipates. Consensus upgrades should catalyze near-term share performance while margin growth drives multiple expansion, in our view."
While consensus estimates have risen 36.5% for FY 2014 and 30.8% for 2015 over the past three months, the firm still sees upside risk to the consensus. The firm's estimates are 6.7% above the Street for 2014 and 11.5% above for 2015.
Shares of American Airlines closed at $36.56 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- PayPal (PYPL) to Acquire Xoom (XOOM) in $890M Deal
- Cowen Starts Limelight Networks, Inc. (LLNW) at Outperform
- UPDATE: Barclays Resumes Cypress Semi (CY) at Overweight
Create E-mail Alert Related CategoriesAnalyst Comments, Hot New Coverage, New Coverage
Related EntitiesGoldman Sachs, Standard & Poor's, Earnings
Sign 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!