Scott Kirby Hire a Positive Surprise for United (UAL), While American (AAL) Expected to Take a Hit - Credit Suisse
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Credit Suisse analyst Julie Yates views news that United (NYSE: UAL) hired away American Airlines' (NASDAQ: AAL) Scott Kirby as President as a big surprise and should be a meaningful positive for UAL shares.
"We expected a new President role to eventually be added (has recently been held by the CEO) to the UAL C-Suite following other executive and board changes earlier this year, but few anticipated CEO Munoz would be able to land Scott Kirby, American (AAL)'s former President and someone many view as one of the best revenue managers in the industry," Yates commented.
She said this strengthens the bench at United and helps round out the recent wave of management appointments.
"While the stock didn't react much to the CFO & CCO announcements, Mr. Kirby is more well-known to the Street and should drive a positive reaction," she added.
Yates said it is hard to spin as a positive for AAL and they expect the stock to take a hit.
"The BoD's decision to release Kirby as a result of succession planning is rather surprising and could drive the stock to underperform near-term as investors wrangle with what this means for AAL and whether there is an untold story," she said. "Mr. Kirby has been a part of the executive team running AAL for many years (previously US Airways, America West), and we assumed he would eventually succeed CEO Doug Parker (who is only 55 years young)."
The firm maintained an Underperform rating and price target of $34 on AAL and a Neutral rating and $47 PT on UAL.
Shares of American Airlines closed at $36.17 yesterday.
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