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Friday, June 26, 2020 9:19:23 AM
American Airlines’ stock AAL, +0.99% closed up 1.0% at $13.17, erasing a loss of as much as 6.6% at its intraday low. The gain snapped a six-session losing streak, the longest since the six-day stretch ended April 2, in which the stock had tumbled 23.4%.
The stock’s late rally into positive territory comes after the air carrier announced a $4.5 billion boost to liquidity this week, including a $2.5 billion notes offering that priced late Wednesday and $2 billion worth of common stock and convertible debt offerings that priced on Tuesday.
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The offering of $2.5 billion senior secured notes due 2025, which was upsized from $1.5 billion, priced slightly below par — 99% of face value — despite paying an interest rate of 11.75% per annum. That compares with the yield on 5-year Treasury notes TMUBMUSD05Y, 0.313% of 0.32%.
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While the increased cash balances following the offerings “removes liquidity risk,” UBS analyst Myles Walton American’s “problem” isn’t the amount of cash it has, but how much cash it burns to operate. And with cash burn set to continue, “the return to normalized earnings is so far out that material downside remains for the equity,” Walton wrote in a note to clients.
He reiterated the sell rating he’s had on the stock since late 2019, but trimmed his price target to $9, which is 28.5% below current levels, from $10.
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American’s stock became part of a broader airline sector rally, as the U.S. Global Jets exchange-traded fund JETS, +1.53% climbed 1.5% to bounce of Wednesday’s three-week closing low. The Jets ETF, which dropped 5.9% on Wednesday to suffer a fifth loss in six days, has lost 24.4% since closing at a three month high of $21.94 on June 8.
Among the sector tracker’s other more-active components, shares of United Airlines Holdings Inc. UAL, +4.89% ran up 4.9%, Delta Air Lines Inc. DAL, +2.45% climbed 2.5%, Spirit Airlines Inc. SAVE, +2.83% hiked up 2.8%, Southwest Airlines Co. LUV, +2.23% advanced 2.2% and JetBlue Airways Corp. JBLU, +4.04% rallied 4.1%.
The Dow Jones Transportation Average DJT, +1.13% , which includes six airline components, rose 1.%, while the Dow Jones Industrial Average DJIA, +1.17% jumped 299.66 points, or 1.2%.
Helping fuel the rally, data from the Transportation Security Administration (TSA) shows that the number of people going through traveler checkpoints continues to increase.
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The average daily number of travelers for the week ended Sunday has increased for nine straight weeks, to reach 522,327 in the latest week, up from a trough of 97,799 for the week ended April 19, according to a MarketWatch analysis of TSA data. Meanwhile, the decline from a year ago in average daily passengers per week has decreased each week, to 80.0% in the latest week from a peak of 95.8%, also for the week ended April 19.
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More ominously, however, the number of new cases of the coronavirus illness in the U.S. rose to 34,700 on Wednesday, the highest level since the peak of 36,400 seen in late April, according to the Associated Press, with data aggregated by Johns Hopkins University of Medicine indicating 30 states are seeing increased infection rates over the past week.
Recent AAL News
- The Gross Law Firm Notifies American Airlines Group Inc. Investors of a Class Action Lawsuit and Upcoming Deadline - AAL • PR Newswire (US) • 08/29/2024 09:55:00 AM
- W2 by GO7 joins the UATP Network as its Newest Issuer • PR Newswire (US) • 08/27/2024 12:00:00 PM
- American Airlines Group Inc. Sued for Securities Law Violations - Investors Should Contact The Gross Law Firm for More Information - AAL • PR Newswire (US) • 08/26/2024 09:45:00 AM
- American Airlines Group Inc. Sued for Securities Law Violations - Investors Should Contact The Gross Law Firm Before September 16, 2024 to Discuss Your Rights - AAL • PR Newswire (US) • 08/22/2024 09:45:00 AM
- Moore Law PLLC Encourages Investors in American Airlines Group Inc. to Contact Law Firm • PR Newswire (US) • 08/20/2024 12:03:00 AM
- American Airlines Group Inc. Securities Fraud Class Action Lawsuit Pending: Contact The Gross Law Firm Before September 16, 2024 to Discuss Your Rights - AAL • PR Newswire (US) • 08/19/2024 09:45:00 AM
- American Airlines and Stand Up To Cancer (SU2C) campaign takes off to accelerate funding for cancer research • PR Newswire (US) • 08/15/2024 02:00:00 PM
- American Airlines Group Inc. Securities Fraud Class Action Lawsuit Pending: Contact The Gross Law Firm Before September 16, 2024 to Discuss Your Rights - AAL • PR Newswire (US) • 08/15/2024 09:45:00 AM
- Wego Joins UATP Network, Enhancing Supplier Relationships in MENA Region • PR Newswire (US) • 08/13/2024 12:00:00 PM
- September 16, 2024 Deadline: Contact The Gross Law Firm to Join Class Action Suit Against AAL • PR Newswire (US) • 08/08/2024 09:45:00 AM
- Investors who lost money on American Airlines Group Inc.(AAL) should contact The Gross Law Firm about pending Class Action - AAL • PR Newswire (US) • 08/05/2024 09:45:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/01/2024 08:49:59 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 08/01/2024 08:48:06 PM
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