Morgan Stanley Feels Uncertainty About Atlas Air Worldwide Holdings

In a report published Thursday, Morgan Stanley analyst John D. Godyn reiterated an Underweight rating on Atlas Air Worldwide Holdings AAWW. In the report, Morgan Stanley noted, “AAWW reported a 4Q13 EPS beat of $1.66 vs. consensus of $1.43. However, mgmt's 2014 outlook called for several percentage points of YoY decline in total block hours and a $0.70 EPS headwind as a result of reduced military activities. Assuming flattish YoY cargo trends, commentary suggests ~$3.10 EPS in 2014. This is well below consensus of $3.85 as well as our own $3.50, which we revised recently along with our downgrade earlier this week. Mgmt's outlook also assumes that the three 747-8s which were returned by British Airways recently would be re-leased; but, the timing, customers, and economics of the new leases are unclear.” Atlas Air Worldwide Holdings closed on Wednesday at $31.43.