Agree, will be very interesting report and ccall Friday. Maybe be a boring report but that will be good if no more LTC landmines and may get lucky and have an eps beat. Alot depends on how LTC reserves flush out for the quarter...gnw's eps can easily be up/down more than expected every quarter due to all the unpredictable sources of earnings. 1Q was a good example, handily beat estimate.
Hard as heck to know what to expect with Fridays report. CEO mentioned they had "momentum" in PR per Klein leaving. Have to take it with a big grain of salt with this CEO as his word has not been gold by any means. See what RDN's report tomorrow is...and if gnw stock reacts. I do like that expectations appear very low so even a decent report and guidance should move pps up.
Good info Unc....shows how poorly aal has performed not only this year but way back to 7-2014 when pps was about where we are now. That's when prasm and Venny issues popped up. At the time it was thought Venny was the big prasm drag, boy if only that was it. Hopefully the worm is finally turning and aal will play some catching up but hard to see hitting new highs like others you mentioned any time soon. There would have to be a dramatic change in market/big money sentiment on aal's valuation multiple. Possible but I'll be looking at selling November calls soon if pps keeps rising.
She has 2017 eps less than 2016 which must be due to expected higher fuel. Multiple expansion to 10 or more only way I see Aal hitting new highs unless big prasm improvement sooner vs later. Market was smarted than thought as 2016 taxed estimates nothing to write home about.
Raised PT to 52 from 48, liked managements more detailed explanation why competing with ulcc's and particularly SAVE. Raised 2016 to 5.50 taxed. So analysts 2016 taxed estimates are between 5.50-6.50...be generous and put a 10 PE and were at 55-65$ pps.
I'd be very concerned if pps was at 12$ like this time last year, not so worried at 5$. Yes MI in Canada and Australia trading near 52w lows but USMI solid, all comes back to LTC reserves...alot of quick upside imo on any good news . The expectations bar has really been lowered going into Fridays report..that said I would have preferred that estimates had been lowered more than 1c from 23 to 22c. GNWs eps can flucuate alot q to q, 1q was a big beat but LTC will have to be much better than expected because its hard to see MI being strong due to Canada/Australia..EPS important but agin GNW is an asset /credit quality play and thats where we need some positive developments
Todd, of course PE is higher on taxed basis...7-2014 was the first warnings of what to come, pps got the huge post Ebola/OIl crash runup but the prasm/LA issue just kept getting worst and than Wright Amendment/Love Field. Low oil masked these significant issues for awhile and the SP add was a huge gift in hindsight.
//The forward guidance of (5%-7%) PRASM improvement from (6.8%) this quarter has not been played out, of course, this is another story for next week. // I thought it would have played out better, believe ual's 4q guide was the same as 3q and pps is up nicely. Market clearly does not like the punching match with SAVE et al and of course Brazil is still a mess . I was hoping for some comments on when/if prasm would turn flat/posiive if aal standing by their previous 2H 2016 comment. Analysts missed that one badly.
They did say plan on paying down debt , did not say when would do it. I am not crazy about the high debt even with lower interest costs due to refinancing, still have to pay the principal off but I understand their rational. I would expect a substantial divy increase once get thru this buyback period when will have around 600m diluted shares. 20c increase of 120m year will be chump change vs cost of buybacks..
Ex SAVE, aal has been a very poor investment vs. other airlines since 7-2014 when prasm/LA issues fwere first mentioned and has been dead money since than. I feel management doing the best they can and imo their efforts will eventually pay off but there will be alot of catching up to do, aal would be closer to 70$ if it had kept pace with a number of other airlines. Fortunately oil has been very low and they have been buying back shares which hopefully will be a bridge to revenue growth and higher pps.