JP Morgan Cuts Opinion on Continental Airlines

Analyst Jamie Baker cites company liquidity and stock price valuation concerns

JP Morgan cut its investment recommendation on Continental Airlines (CAL ) to underweight from neutral, citing liquidity and valuation concerns.

Analyst Jamie Baker said that the company will need to raise or refinance an additional $400 million to maintain adequate liquidity in 2006. She also cited factors such as the company's costs and second half 2006 valuation premium to AMR, (American Airlines' parent.) She cut her third quarter earnings per share estimate to 13 cents from 60 cents, widened her fourth quarter loss estimate to $1.79 from a $1.55 loss, and said she sees 2005 losses widening to $3.69 from prior estimated losses of $2.90.

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