Credit Suisse First Boston upgraded Continental Airlines (CAL) to outperform from neutral.
Analyst James Higgins is tilting his bias in the airline group toward more leverage in what he expects to be a gradually improving economy. He cited a substantial increase in his liquidity forecast for Continental, driven by the explicit recognition of a potential benefit of the sale of the carrier's 53.1% stake in ExpressJet Holdings. He estimates that the year-end 2003 liquidity potential for Continental could be as high as about $1.3 billion.
Higgins also cited Continental's relatively strong operating cash flows, which have been driven by its comparatively low costs and superior revenue momentum. He maintains his $16 12-month target.