American Airlines' Revenue Tracking Well As Demand Picks Up, Says Analyst
Raymond James analyst Savanthi Syth has reiterated a Market Perform rating on the shares of American Airlines Group Inc (NASDAQ: AAL).
The analyst has moved her EPS estimates higher due to correcting for a calculation error related to the convertible debt dilution.
Her 4Q22E/2023E/2024E EPS are revised from $0.48/$0.50/$2.10 to $0.54/$0.58/$2.34.
Syth added the revised estimates continued to reflect demand weakness in 1H23 not apparent in current trends, and anticipated new labor contracts starting 2023.
Raw jet fuel has averaged about $3.40 QTD, only slightly ahead of the analyst’s $3.38 forecast for 4Q22.
She believes revenue for the U.S. airline group is currently tracking at or somewhat above the higher end of guidance ranges due to demand in off-peak periods holding up better than expected and pliable weather during Thanksgiving holiday travel.
Syth continues to expect greater revenue momentum at Delta Air Lines Inc (NYSE: DAL) and United Airlines Holdings Inc (NASDAQ: UAL) due to relative exposure to large-corporate and international demand recovery.
She also looks forward to see American closing its margin gap relative to peers as a result of the simplified fleet, up-gauging of existing aircraft, and network changes.
Price Action: AAL shares are trading higher by 1.01% at $13.97 on the last check Tuesday.
Photo Via Wikimedia Commons
Latest Ratings for AAL
Date | Firm | Action | From | To |
|---|---|---|---|---|
Mar 2022 | Seaport Global | Downgrades | Buy | Neutral |
Jan 2022 | Redburn Partners | Downgrades | Buy | Neutral |
Jan 2022 | Morgan Stanley | Upgrades | Underweight | Equal-Weight |
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