I listened...Kirby saying that margins going forward expected to be similar to 2014/15 imo is why pps popped today. Of course we are waiting for 2017 rev recovery just like we were waiting for 2016 BOY recovery...market is rightly skeptical...
Current estimate 1.64...I come up with about 1.71-1.77 .
My calculation based on:
10.3B revs at 15% margin / 550M shares =2.81 share @ 67% = 1.77 share
1.71 at 14.5% margin which may be more likely with fuel rise..
Downside risk is lower revs and margin. Upside if buyback more shares
Crummy position aal in, need oil/fuel to rise to improve prasm but will hurt profits...if fuel drops helps profits(less and less yoy) but kills prasm...the horror. Europe has been one fairly stable market for aal now its going downhill per overcapacity and terror effects. MKM saying sell airlines, March last year they said buy right before big selloff...someone else saying to short per TD-Ameritrade(Reco ? never heard of and no info)
Just saw video, she said that its all about poor pricing and reduced margins with higher labor and fuel costs and "maybe" higher fares in a couple months. Market knows costs are up. it does not know if fares will follow...Kirby said if you dont believe fares will rise with fuel than you should not buy airlines... Business 101, not good when costs going up and revenues going down..fuel is up but no news of fare increases....she did mention capacity cuts are coming but again its "show me" time for airlines...show me the money/increased revenues/higher fares
//The 20c/gal difference will knock the margin off by almost 2% from 14%-16% to 12% -14%.//
They will state 2q margin range with May report, ditto DAL next week. Market is pricing in lower margin...fares need to rise to offset higher fuel costs but no news of it happening. AAL saying will be a 2-3 month lag before fares rise...
// I understood exactly how Cavalier was thinking about when they guided 14-16% margin when they last year made 17.20%// That was the big kick in the #$%$ at 1q ccall, that margins would drop that much even with much lower fuel costs. 2015 3q margin was 17.7%...will see if dal/aal drop 2q margin estimate with May reports...no news of fare increases does not bode well. Market pricing in lower margins especially for aal..all about margins now.
Last year remember the talk about "peak margins" ...I agreed that 2105 would be peak margins but did not foresee such a big drop in revenues which is resulting in a larger decline in margins than expected. Only way aal pps will go up much will be if start to get news of fare increases, market is rightly skeptical that fares will indeed increase .
Plan was to sell all of LI/Annuity in 2015 but could not do without restructuring...so unlikely will be able to sell all of it until restructuring completed...I am assuming they could still sell blocks of LI/Annuity before the restructuring. I believe the market expected them to sell LI/Annuity for 2B but not sure. Market liked idea of selling to reduce debt...
Obvious screw up buying too early They knew South America and Dallas and other big headwinds from ulccs etc...they have been drinking the kookaid
1q BV was 28.19 share. However, it is only 19.80 excluding accumulated comprehensive income(loss) which was 4.2B as of 3-31-16, up from 3B 12-31-15. Not sure what this all means other than that the 19.80 ex BV is considered the more valid number when valuing gnw and other insurers, not the 28.19..
//What the #$%$ have they been doing/hiding if they really think the stock has 50% Upside Potential?".// Typical Fish behavior before they drop their PTs...average will likely be closer to 40$
Good find Anthony...interesting that Moodys is saying the restructuring is a credit positive yet they downgraded gnw..
No surprise as that was original plan BO2015
It's all about the base(prasm) no treble(everything else)..been a year and half since I first said that , didnt think would still be true