UBS Warburg Cuts UAL to 'Sell'
UBS Warburg downgraded its investment recommendation on UAL Corp. (UAL ) to sell from buy. Analyst Sam Buttrick says the company's 2002 fundamentals are poor and the revenue environment remains weak. He says the recent fare war between AMR Corp.'s American Airlines and Northwest Airlines ended quickly last Friday with little fanfare. Buttrick says potential bankruptcy -- and associated capacity and labor cost reductions -- can form the core of an industry profit recovery, as in the early 1990's. He sees the industry as "flattish" in 2003 with a modest decline in unit cost, excluding fuel. Buttrick says not to rule out liquidation in Chapter 11 cases, as not all bankruptcy reorganizations are successful. He adds that "for every Continental, there's an Eastern." The analyst widened his $25.60 2002 loss estimate for UAL to a $28.85 loss. He cut his $20 price target to $1.50.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Comedian Byron Allen Buys the Weather Channel for $300 Million
- Stocks Tumble in Biggest Weekly Decline Since 2016: Markets Wrap
- Musk Takes Down the Tesla and SpaceX Facebook Pages
- World's Biggest Cryptocurrency Exchange Is Heading to Malta
- A Horror Week for the Dow Has Investors Begging for Trump Respite