American Airlines Group Inc (AAL)

[j4turbo]

S&P CAPITAL IQ MAINTAINS STRONG BUY OPINION ON SHARES OF AMERICAN AIRLINES

10:10 am ET January 29, 2016 (S&P Capital IQ) Print
We trim our 12-month target price by $10 to $60, an Enterprise Value to EBITDAR multiple of 6.3X our '16 estimate, a premium to peers. We expect most AAL to maintain strong profitability aided by another step down in fuel costs in '16. However, investors remained focused on unit revenue declines, which persist. We cut our '16 EPS estimate to $6.88 from $6.95, and start our '17 EPS estimate at $6.62. AAL Q4 adjusted EPS of $2.00 vs. $1.52 beat our $1.89 estimate, with revenues in line with our expectations. We note the shares are trading at under 6X forward earnings.