Imperial Capital Cuts Price Target for American Airlines Group Inc (AAL) as Shares Continue to Trade Closer to PRASM Commentary
In a research report published Wednesday, Imperial Capital analyst Scott Buck reiterated an Outperform rating on shares of American Airlines Group Inc (NASDAQ:AAL), and reduced the price target to $65 (from $73), which implies an upside of 86% from current levels.
Buck explained, “Despite reporting the best quarterly results in the industry’s history and guidance suggesting a record 2015, AAL shares, and those of other airlines, continue to trade closer to PRASM commentary near term. For investors with a longer investment horizon, management indicated it expects PRASM trends to turn more positive moving into the second half of 2016 as near-term revenue trends are likely to face similar headwinds as 2Q15, including increased competitive capacity and weaker macroeconomic trends in South America.”
However, “Recent operating results and management commentary continue to provide us with confidence in the company’s ability to generate the highest 2015 operating margins and earnings among the legacy carriers. We continue to view American as an earnings story and believe investors should turn their attention to record operating results rather than PRASM.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Scott Buck has a total average return of 3.1% and a 33.3% success rate. Buck has a 29.7% average return when recommending AAL, and is ranked #1942 out of 3742 analysts.
Out of the 10 analysts polled by TipRanks, 5 rate American Airlines Group Inc stock a Buy, while 5 rate the stock a Hold. With a return potential of 61%, the stock’s consensus target price stands at $63.