UPDATE: Morgan Stanley Downgrades American Airlines (AAL) to Equalweight

(Updated - March 22, 2017 8:52 AM EDT)

(updated to add analyst comment)

Morgan Stanley downgraded American Airlines (NASDAQ: AAL) from Overweight to Equalweight with a price target of $44.00 (from $52.00).

Analyst Rajeev Lalwani comments "While we believe the narrative still has legs with the maturation of cabin segmentation, we believe there will be offsets from industry dynamics as previously discussed. First and foremost, the airline is one of the more cyclically leveraged plays, having the weakest margins (second only to UAL) and the highest debt profile amongst our coverage. Second, pricing strength in key exposures such as US Domestic and LatAm will face pressure going forward given rising capacity on behalf of both the carrier and competitors, which may offset strength from Basic Economy and other initiatives. Finally, compares will prove tougher through year-end as the impact of the credit card agreement and low growth benefits are lapped."

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 $40.42 yesterday.

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