Bear Stearns Upgrades AMR Corp. to 'Outperform'

Analyst David Strine cites better-than-expected unit revenue performance for air carriers, and likes American's outlook

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.

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