Credit Suisse First Boston upgraded AMR Corp. (AMR ) to outperform from neutral.
Analyst James Higgins says he's much more comfortable with the liquidity outlook for American Airline parent AMR after it provided its second-quarter cost guidance Wednesday night that was 5% better than his prior estimate. Higgins narrowed the $3.60 second-quarter loss estimate to a $1.95 loss, and reduced the $15.50 2003 loss estimate to an $11.50 loss.
He says the improved cost outlook, and the assumption of some sequential revenue improvement from the depressed second quarter, suggests a 2003 cash balance of $1.4 billion to $1.5 billion, which should provide AMR with enough cushion above the $1 billion required by debt covenants to substantially reduce the odds of a bankruptcy filing. Higgins has an $18 target.