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American Airlines PT Lowered to $18 at Bernstein SocGen Group

Published 09/07/2023, 05:44 PM
Updated 05/29/2024, 06:11 AM
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Bernstein SocGen Group analysts lowered the price target on American Airlines (NASDAQ:AAL) to $18.00 (from $22.00) while maintaining an Outperform rating.

The analysts comment "AAL’s significant 2Q guidance cut and announcement of CCO Vasu Raja’s departure mark a disappointing start to what should be a robust summer season. We’re concerned the commercial direction shift signaled by senior leadership change will take time to implement. A significant miss driven in part by close in bookings puts AAL’s ability to reap the full value of a robust summer flying season in greater doubt. AAL cut EPS guidance from $1.30 to $1.08 (17%) as weaker unit revenues (now expected at -5% to -6% vs. prior -1% to -3%) more than offset the benefit from stronger unit cost performance / lower fuel prices. We do think the market was positioned for AAL to guide down unit revenue, but not to this extent. AAL cited domestic capacity as the root of the issue with supply not being absorbed, which is negative for the overall market. Part of that problem also stemmed from close in booking weakness, which we attribute to loss of corporate travel share associated with recent distribution strategy changes (positive read across to DAL / UAL)."

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