AAL Stock

[WeAAsles]

AAL stock taking a nose dive today. Down 4% almost $2 before noon.
Today Imperial Capital raised its target from $46 to $55.
WTF?

NEW YORK (TheStreet) -- Shares of Delta Air Lines Inc.  (DAL_) are down -5.11% to $38.25 after it reported lower than expected international yields and lower business demand to Latin America due to the World Cup for the month of June.

http://www.thestreet.com/story/12763667/1/why-delta-airlines-dal-stock-is-dropping-today.html?puc=yahoo&cm_ven=YAHOO


 

 

[WeAAsles]

Basically Latin America kind of shut down the shop for the games. They take that soccer pretty serious over there..

 

[1AA]

NEW YORK (TheStreet) -- Shares of Delta Air Lines Inc.  (DAL_) are down -5.11% to $38.25 after it reported lower than expected international yields and lower business demand to Latin America due to the World Cup for the month of June.

http://www.thestreet.com/story/12763667/1/why-delta-airlines-dal-stock-is-dropping-today.html?puc=yahoo&cm_ven=YAHOO


 

Oh, Oh WT is not going to like this.

 

[WeAAsles]

Oh, Oh WT is not going to like this.

lol. That guy is mental. I have him on ignore and before I log on I can see he's still stalking me.

I really think he's a paid blogger for DL? They get paid per word posted and he posts thousands of words.

 

[WeAAsles]

AAL stock taking a nose dive today. Down 4% almost $2 before noon.
Today Imperial Capital raised its target from $46 to $55.
WTF?

Or it could be this one? I would think that the market would have already factored this in a long time ago though.

NEW YORK (TheStreet) -- Shares of American Airlines Group Inc. (AAL_) are down -4.04% to $42.09 after a federal judge yesterday approved about $400 million in fees and expenses owed to the professionals responsible for guiding American Airlines through its Chapter 11 restructuring, the Wall Street Journal reports.

http://www.thestreet.com/story/12763833/1/why-american-airlines-group-aal-stock-is-falling.html?puc=yahoo&cm_ven=YAHOO

Always up and down days in this industry. I'm not sweating it just yet.

 

[WorldTraveler]

no, it has to do with industry fundamentals.

Oh, Oh WT is not going to like this.

DAL is consistently the first airline to report RASM among US airlines and their RASM report was released today with this comment:

"Consolidated passenger unit revenue (PRASM) for the month of June increased 4.5 percent year over year as continued corporate and domestic strength offset lower than expected international yields driven by industry-wide capacity increases and lower business demand to Latin America due to the World Cup. For the June quarter, unit revenues increased 6 percent, in line with initial guidance given in late April."

decreased business demand in Latin America is likely to affect AAnother carrier besides DL will be affected a whole lot more because DL is, as we know, not the largest airline in Latin America.

And note that the secondary reason is because of industry-wide capacity increases - which is exactly what a number of analysts have feared all along - that capacity discipline will be thrown out the window as airlines try to fix their networks.

And the implications are that the carriers that have the greatest ability to slug it out to achieve their strategic objectives will be able to continue to do so while those that are most vulnerable will be forced to act first to reduce capacity.

 

[eolesen]

Business demand is down in general, but having LATAM as a oneworld partner might even things out a bit for AA, as they probably have snagged a little more of the Spectator market for those heading from Asia & Europe to watch the games.

 

[WorldTraveler]

and spectators don't pay business class rates.

Convention business is down dramatically.

There are 12 cities in Brazil that hosted the games. All of them have had special procedures in place when games occurred in their cities.

In addition, virtually nothing happens when Brazil plays - and the same thing has happened elsewhere in Latin America.

LATAM can't generate business that isn't there.

The World Cup like many major global sporting events interrupts the normal cycle of business - and it isn't just in Latin America.

and the whole World Cup is only part of the issue. Global oversupply of seats is the other problem. DL didn't say where the problem was but DL's LF on the Atlantic was down with slightly higher capacity.

It is very likely that US' decision to pull down some of its TATL flying earlier is related to the same issue.

It was a given that consolidation would produce a "we all need this much more added to our network" mindset and then many of the benefits of consolidation are lost.

further, there are competitive movements that result from mergers and other carrier market additions that aggravate the problem.

example - AS said that there is too much capacity in SEA as a result of DL's expansion there but their response will be to increase capacity from SEA even further next year? what kind of profit motivated logic is that?

NONE.

all it is the old market share protection and expansion logic which has derailed many airline recoveries of the past.

 

[FWAAA]

Or it could be this one? I would think that the market would have already factored this in a long time ago though.

NEW YORK (TheStreet) -- Shares of American Airlines Group Inc. (AAL_) are down -4.04% to $42.09 after a federal judge yesterday approved about $400 million in fees and expenses owed to the professionals responsible for guiding American Airlines through its Chapter 11 restructuring, the [SIZE=100%]Wall Street[/SIZE] Journal reports.

http://www.thestreet.com/story/12763833/1/why-american-airlines-group-aal-stock-is-falling.html?puc=yahoo&cm_ven=YAHOO

Always up and down days in this industry. I'm not sweating it just yet.

You're right - today's price movements had nothing to do with AA's bankruptcy professional fees, as those weren't a surprise.   The firms had been submitting monthly bills since 2011, and thus the $400 million total was known months ago.
 
DL and UA dragged down the industry today:
 
http://www.marketwatch.com/story/delta-united-drag-down-airline-sector-2014-07-02?siteid=yhoof2
 
AA was just along for the ride.    

 

[WorldTraveler]

AA was down considerably more than the low fare carriers that are predominantly domestic.

The only reason why AAL didn't fall as far is because AAL stock is still not properly valued for the size of the company, in part because they are still making stock distributions as part of the BK process.

It also explains in part why AA is worth less than DL even though AA is a larger company.

Investors are cautiously optimistic about AA's future but they still don't value AA as highly as they DL.

given that AA won't get its traffic report out until a few days before DL reports its quarterly financial statistics, the market won't be able to weigh the effect of all 3 carriers' financial performance, esp. since UA doesn't give RASM data on a monthly basis any longer.

to somehow think that AA is immune from the excess int'l capacity in the industry - much of which AA itself has caused - is purely delusional.

 

[Glenn Quagmire]

AAL is still the top performing major airline stock on a 1-year basis.

 

[700UW]

And a nice report in Barron's today, expecting them to surpass Delta's stock performance.
 
http://online.barrons.com/news/articles/SB50001424053111904248904580005522461112144?mod=trending_now_1
 
Target price of $55 a share.
 


 


 

July 3, 2014 5:15 a.m. ET
 
American Airlines Group ( AAL : Nasdaq)

By Imperial Capital ($43.86, July 2, 2014)
 
We are maintaining our Outperform rating and raising our one-year price target to $55 from $46.
American Airlines Group (ticker: AAL ) remains one of our top picks in the sector as we expect the new management team to continue to make structural changes to legacy AMR operations which should extend earnings upside beyond the benefits of traditional merger synergies.


 
 

 

[WorldTraveler]

yet AAL was the poorest performing of the big 4 today while UAL was the best, just the opposite of what happened yesterday.

The market corrected for yesterday's big declines of DL and UA while AAL went down further today.

that is what the market does.

AAL is still the top performing major airline stock on a 1-year basis.

 
 not hard to do since AAL wasn't even traded a year ago.

And a nice report in Barron's today, expecting them to surpass Delta's stock performance.
 
http://online.barrons.com/news/articles/SB50001424053111904248904580005522461112144?mod=trending_now_1
 
Target price of $55 a share.

given that AA is a larger company than DL, they should be worth more assuming they can proportionate profits.

 

[jcw]

So let's see DAL is up 40% YTD - AAL is up 64% YTD
 
So one day's movement in stock price means DL is better  how does that logic work

 

[WorldTraveler]

again, AAL didn't even exist a year ago.

It isn't hard to come out of BK and outperform the industry.

feel free to compare AAL and UAL to DAL and LUV this week and if you do you will see that DAL was the LEAST NEGATIVELY IMPACTED stock this week of the big 3 int'l carriers.

http://finance.yahoo.com/echarts?s=DAL+Interactive#symbol=DAL;range=5d