Airline Stocks Soar: American Airlines Leads the Charge
Upgraded Ratings Spark Rally
American Airlines Group (AAL) shares skyrocketed on Monday, driven by a wave of optimism from brokerage firms Jefferies and TD Cowen. Both firms upgraded their ratings to “buy” and significantly raised their price targets, sending the stock soaring.
Jefferies Sees Upside Potential
Jefferies analysts predict a bright future for American Airlines, citing “ongoing corporate share recapture, lower capacity and capex” as key drivers of growth. The firm’s exclusive credit card partnership with Citi (C), set to launch soon, is also expected to give the airline a significant boost. With this in mind, Jefferies raised its price target to $20 from $12, signaling a potential surge in the stock’s value.
TD Cowen Joins the Chorus
TD Cowen echoed Jefferies’ sentiments, upgrading American Airlines to “buy” from “hold” and increasing its price target to $25 from $17. According to Tom Fitzgerald, TD Cowen’s analyst, the firm had previously underestimated the airline’s ability to overcome its challenges. “We were too early with our upgrade a year ago and then failed to appreciate the transitory nature of their headwinds,” Fitzgerald noted.
Stock Performance
American Airlines stock responded enthusiastically to the news, jumping 4.5% to $17.74. This marks a remarkable turnaround from its four-year low of $9.07 last August. While the stock has risen 30% over the past year, it still lags behind rivals United Airlines (UAL) and Delta Air Lines (DAL), which have seen gains of 140% and 50%, respectively.
A New Era for American Airlines?
With its upgraded ratings and rising stock price, American Airlines appears poised for a strong 2025. As the airline continues to recapture corporate market share and benefit from its partnership with Citi, investors may be wise to take notice of this emerging opportunity.
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