Bear Stearns upgraded American Airlines parent AMR Corp. (AMR) to outperform from peer perform.
Analyst David Strine says his higher earnings estimates for the airline industry now exceed consensus forecasts for each of the U.S. carriers. He cited better-than-expected unit revenue performance as well as a sense of slightly better traction on cost cutting. He sees fourth-quarter booked loads up in the low- to mid-single digits, with yield up mildly (1% on average amongst carriers).
Strine He says AMR is the most preferred of the major carriers; the 2004 targets across the sector imply average a return north of 25%. He narrowed the $1.30 third-quarter loss estimate on AMR to a 40 cents loss, and cut the $1.55 fourth-quarter loss estimate to a $1.30 loss.