UBS Maintains a 'Neutral' on AMR Corp (AMR); Thoughts on Liquidity
Tweet
Share
E-mailGet Alerts AMR Hot Sheet
Price: $166.05 +6.72%
Rating Summary:
1 Buy, 10 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 10 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
UBS maintains a 'Neutral' on AMR Corp (NYSE: AMR) price target lowered from $3.75 to $3.00.
UBS analyst says, "AMR posted a loss again in 3Q of $162 million. Guidance suggests a bigger loss in 4Q, which is normal sequentially. Given the drop in cash balances over time while continuing to lever up, we find AMR to be a very high risk company. Clearly this is reflected in the share price and its volatility."
"There are a number of moving parts when estimating the outlook for cash: fuel prices, revenue, % debt refinanced, % capex financed, timing of credit card holdbacks, unencumbered assets, how much cash is needed to operate, and seasonality. Under our base case assumption (no recession, current fuel curve), AMR’s cash bal drops but a Chapter 11 filing is avoided. We believe the company has ~$1-$1.5B cash cushion. Put differently, we think the company can at max absorb 4-6% lower revenue than we’ve forecasted or $17-$25/bbl higher oil prices."
UBS cuts FY11 EPS estimate from (3.34) to (3.60) and FY12 from (1.61) to (1.72).
For more ratings news on AMR Corp click here and for the rating history of AMR Corp click here.
Shares of AMR Corp closed at $2.61 yesterday.
UBS analyst says, "AMR posted a loss again in 3Q of $162 million. Guidance suggests a bigger loss in 4Q, which is normal sequentially. Given the drop in cash balances over time while continuing to lever up, we find AMR to be a very high risk company. Clearly this is reflected in the share price and its volatility."
"There are a number of moving parts when estimating the outlook for cash: fuel prices, revenue, % debt refinanced, % capex financed, timing of credit card holdbacks, unencumbered assets, how much cash is needed to operate, and seasonality. Under our base case assumption (no recession, current fuel curve), AMR’s cash bal drops but a Chapter 11 filing is avoided. We believe the company has ~$1-$1.5B cash cushion. Put differently, we think the company can at max absorb 4-6% lower revenue than we’ve forecasted or $17-$25/bbl higher oil prices."
UBS cuts FY11 EPS estimate from (3.34) to (3.60) and FY12 from (1.61) to (1.72).
For more ratings news on AMR Corp click here and for the rating history of AMR Corp click here.
Shares of AMR Corp closed at $2.61 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Fiserv (FISV) PT Lowered to $60 at Freedom Broker
- Powell Industries (POWL) PT Lowered to $235 at Cantor Fitzgerald
- Wolverine World Wide (WWW) PT Raised to $31 at UBS on Growth, EPS Upside Potential
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
UBS, BankruptcySign 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!
