Figured he would come down but still heck of a target...he values aal the way it would be valued by most fundamental metrics and without the huge "airline discount".
//Anyway ... those are still remarkable earnings relative to the stock price//
Yup, and with oil likely to stay "lower" going forward would think aal would be repriced at a higher multiple even with soft rasm. If assume 1$ gal in fuel savings for next 2-3 years that's a lot of profits flowing to the bottom line.
Normally aal's high debt would be a negative but not when refinancing at 4% and generating 7b in annual profits and 10b in cash....nice try swamper
Yes, appears they are getting their ducks well in order per the reservation integration in 4q and possible synergy savings greater than estimated if all goes well .
Record Tax Free Profits for 2015
Low Valuation/Multiple Expansion Likely Going Forward 1-2 years
Possible Merger Synergies in Excess of what is expected
Divy Increase 2q ccall likely
Low Cost Refinancing
Solid US Econom/y Demand
Industry Capacity Restraint/Not Same Ol Airline Business
Low Cost Carriers adding capacity
Problem imo is not the eps numbers its still the crazy low multiple CS/Cowen and especially the market are still placing on aal , I still believe aal will eventually be repriced at around a 10 multiple just a matter of when. 10x 2016 after tax eps of 7$ and were at 70$ and eps could be 7$...analyst have to lower 2q estimates unless oil tanks and tanks soon..
CS lowered from 60 to 55, didn't matter to them that 1.73 handily beat their 1q estimate...but I will say my short term pt is 55$ and will look to sell calls if approaches 55. My guess is we will need an oil decline to see 55 or higher in short term and any oil increase and we will likely revisit 50$...
Bears, I can understand and agree that it is a stressful stock to own. I often wonder why I picked an airline to be my biggest holding because of all the outside factors that can adversely affect the industry. I plan on hanging on and hope to get an op to sell some calls if get a pps bounce, missed out badly not selling calls on the S&P gift. IMO aal still has significant upside but like I mentioned after the 4q ccall will not likely see big upside until the prasm/revenue/intl worm turns.
Agree that estimates will drop,new eps estimate likely to around 3.00 and revs to around 11b...I am still holding out for a significant oil drop which imo could still occur especially if get some decent news out of Yemen and other screwed up MEast exporting countries
Will beat if oil drops which was suppose to bottom in 2q, fyi, not even one month into 2q...also if estimates drop which they should after poor 2q prasm guidance.