JP Morgan upgraded Continental Airlines (CAL) to overweight from neutral.
Analyst Jamie Baker says he upgraded following recent share-price underperformance. He says Continental is trading more like a carrier in a labor crisis than one that's expected to produce full-year profit.
Baker thinks CEO and Chairman Bethune's planned retirement, weak domestic revenue trends, and recent cost achievements at rival American Airlines don't sully Continental's still respectable cost structure and well diversified network. He considers Continental's break-even ambitions for 2004 as entirely too low. Baker's 65 cents 2004 earnings per share estimate, lowered from 90 cents, is much higher. He sees $3.05 2005 earnings per share.