🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

Citi ups price target on American Airlines, adds to focus list

Published 13/12/2024, 12:38 am
© Reuters.
AAL
-

Investing.com -- Citi lifts price target on American Airlines Group (NASDAQ:AAL), also added the stock into its ‘focus list,’ on potential for significant share price upside driven by earnings surprises.

The brokerage raised its price target for American to $23 from $19, reflecting expectations of higher revenue per available seat mile (RASM) and benefits from a recent credit card agreement.

“Although Delta and United have led the US airlines in terms of postpandemic earnings recovery and share price performance, the market does not seem to fully appreciate the view that American has all the tools it needs to move in the same direction as the latter duo,” ," Citi said in a note

Brokerage views the card agreement with Citigroup (NYSE:C), a strong tailwind for American. Airlines typically generate additional income and working capital from these deals, where card issuers pay for mileage credits linked to card usage.

Citi noted a positive correlation between American’s other income and pre-tax earnings, suggesting the card deal could bolster the airline's profitability.

Despite a 28% rise in American’s stock this year, it has lagged peers like United, which has gained more than 140% and Delta up 58%, indicating that stronger earnings revisions are not fully priced in.

Shares of American Airlines were up ~1% at $17.8 in premarket trading.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.