Raymond James upgrades American Airways to ‘outperform’

Investing.com — Raymond James upgraded American Airways Group (NASDAQ:AAL) to “Outperform” from “Market Carry out” on an improved income outlook and a beneficial risk-reward dynamic.

The brokerage additionally raised its worth goal for the inventory to $24.

Regardless of modest expectations from a brand new co-branded card deal, American’s December replace pointed to a stronger income surroundings. Enhanced engagement with company prospects, although possible at a worth, additionally helps the outlook.

Aggressive home capability and deliberate cabin reconfigurations ought to assist align provide with price-sensitive demand.

A revised gasoline forecast, whereas nonetheless above the ahead curve, affords further earnings tailwinds.

Raymond (NS:RYMD) James stated American is well-positioned forward of U.S. airline earnings, alongside Alaska Airways, Allegiant, and JetBlue. Delta Air Traces (NYSE:DAL) stays the brokerage’s high choose for medium-to-long-term traders, supported by its strong risk-reward profile.

The brokerage famous the U.S. greenback’s energy may bolster worldwide demand, benefiting American’s stronghold in South America. Nonetheless, legacy carriers like Delta and United could achieve a larger benefit as a result of their broader worldwide publicity.

Raymond James additionally sees a decline in regulatory dangers beneath the incoming U.S. administration, which may pave the best way for elevated M&A exercise, notably amongst smaller carriers.

The observe highlighted shifting cabin configurations amongst low-cost carriers, with extra first-class and extra-legroom seats being launched, which may scale back foremost cabin seat development, making a extra premium-focused home providing.