UPDATE: Jefferies Upgrades American Airlines (AAL) to Hold as Best Positioned Airline for 2 Reasons

March 30, 2021 4:48 AM EDT
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Price: $21.55 -2.18%

Rating Summary:
    6 Buy, 11 Hold, 12 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 20 | New: 68
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(Updated - March 30, 2021 8:26 AM EDT)

Jefferies analyst Sheila Kahyaoglu upgraded American Airlines (NASDAQ: AAL) from Underperform to Hold with a price target of $25.00 (from $15.00) after exploring 2023 bull cases for airlines. The analyst we raised the 2023 EPS estimate by 2% to $2.10 from $2.05, accounting for higher yields (+$1.20), with some offset from the increase in fuel prices (-$1.15). AAL is believed to be the best positioned of the network carriers to outperform through the recovery due to the younger fleet at 10.8 years than peers at ~15 years and strong network positioning as a sole operator of 37% of routes vs 25% for peers.

The analyst stated "strong network positioning continues to drive considerable potential to outperform peers as the sole operator on 37% of its routes, which compares to 29% for DAL, and 21% for UAL. A sole-operator position allows for significantly greater yield control, with AAL's routes with 2 competing airlines driving yields ~60% below routes that have no competing airlines. In a rising fuel environment, AAL can pass on a greater portion of costs to consumers with less risk of a bad actor competing on price."

For an analyst ratings summary and ratings history on American Airlines click here. For more ratings news on American Airlines click here.

Shares of American Airlines closed at $22.91 yesterday.


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