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Fundamentals, Expectations For The Big 3 Airliners May Be Peaking

Morgan Stanley issued a note on airlines Tuesday and provided ratings for North American carriers.

Analysts led by Penelope Butcher noted that "A4A system PRASM growth for the US carriers is down 1.5 percent YoY YTD, though, weather events were a headwind for most in 1Q15."

February A4A system PRASM growth declined 0.5 percent year-over-year, according to the report; however, it accelerated from January levels of -2.3 percent.

Domestic and Atlantic markets were seeing more favorable PRASM trends than Pacific and Latin America, according to the analysts.

Butcher added that preliminary schedules indicated an acceleration in capacity in the Domestic and Atlantic region and a deceleration in the Pacific and Latin America for Q2 2015.

Related Link: 7 Reasons Whitney Tilson Is Bullish On Airline Stocks

The analysts concluded that "management commentary continues to point to capacity discipline among most US carriers."

The analysts rated the following companies Overweight:

  • American Airlines Group Inc (NASDAQ: AAL)
  • Delta Air Lines, Inc. (NYSE: DAL)
  • Spirit Airlines Incorporated (NASDAQ: SAVE)
  • United Continental Holdings Inc (NYSE: UAL)

Two airlines were rated Underweight:

  • JetBlue Airways Corporation (NASDAQ: JBLU)
  • Southwest Airlines Co (NYSE: LUV)

Latest Ratings for AAL

Apr 2017JP MorganDowngradesOverweightNeutral
Mar 2017Morgan StanleyDowngradesOverweightEqual-Weight
Feb 2017BernsteinUpgradesUnderperformMarket Perform

View More Analyst Ratings for AAL
View the Latest Analyst Ratings

Posted-In: Morgan Stanley Penelope ButcherAnalyst Color Analyst Ratings Trading Ideas Best of Benzinga


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