Skip to main content

Market Overview

The Airline Sector: American, United Have Earned An Upgrade, Bernstein Says

The Airline Sector: American, United Have Earned An Upgrade, Bernstein Says

Expansion plans and sector-wide upside drivers give United Continental Holdings Inc (NYSE: UAL) a strong market position while American Airlines Group Inc (NYSE: AAL) remains competitive despite United’s growing market share, according to Bernstein. 

The Analyst

Analyst David Vernon upgraded American Airlines from Market Perform to Outperform with a $62 price target and upgraded United Airlines from Market Perform to Outperform with an $81 price target. 

The Thesis

United’s plans to expand capacity came out much higher than the market expected, as company is aiming for 4-6 percent ASM growth through the next three years, Vernon said. (See the analyst's track record here.) 

This expansion represents an opportunity for United to take market share from other airline companies, worrying some airline investors, the analyst said. 

Other potential upside factors include a significant uptick in the economy, favorable changes in government regulation and lower volatility in fuel prices, Vernon said.

For American Airlines, the market has overstated the effects of United’s expansion plans on the sector, the analyst said. American stands to benefit from strong demand for air travel, cost reduction opportunities and better-than-expected execution on branded fares, Vernon said. 

Price Action

At the time of publication, shares of United Airlines were trading up 0.90 percent at $67.61, while shares of American Airlines traded up 3.27 percent at $54.31. 

Related Links:

Analyst: United Continental Has Hit Peak Altitude

Airline ETF Endures Oil's Rebound

Latest Ratings for AAL

Apr 2021Raymond JamesUpgradesUnderperformMarket Perform
Apr 2021Morgan StanleyInitiates Coverage OnUnderweight
Mar 2021JefferiesUpgradesUnderperformHold

View More Analyst Ratings for AAL
View the Latest Analyst Ratings


Related Articles (UAL + AAL)

View Comments and Join the Discussion!

Posted-In: airlines BernsteinAnalyst Color Upgrades Price Target Travel Analyst Ratings General Best of Benzinga

Latest Ratings

ABNBCredit SuisseMaintains164.0
CIRBC CapitalMaintains304.0
YETICredit SuisseMaintains105.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at