In a new report, Credit Suisse analyst Julie Yates updated the firm’s Q1 outlook for airlines ahead of April monthly traffic reports. In addition, Credit Suisse included several price target changes.
Credit Suisse slightly lowered price targets for American Airlines Group Inc AAL, Delta Air Lines, Inc. DAL, JetBlue Airways Corporation JBLU, Southwest Airlines Co LUV, SpiritAirlines Incorporated SAVE and United Continental Holdings Inc UAL.
The firm also raised price targets for Virgin America Inc VA and Allegiant Travel Company ALGT.
In terms of specific numbers, Credit Suisse lowered its Q1 RASM forecast for JetBlue from -4.0 percent to -7.5 percent. In addition, it lowered its Q1 PRASM estimates or Alaska Air Group, Inc. ALK from -7.7 percent to -8.2 percent and for Delta from -3.0 percent to -4.0 percent.
Credit Suisse maintains its view that Southwest is on track for flat RASM in Q1 and also maintains its previous RASM projections for United (-5.8 percent), American (-6.7 percent), Allegiant (-12.5 percent) and Virgin America (-3.7 percent).
“Carriers that provide margin guidance will likely come in at the lower end of rages provided in January given the rise in oil prices,” Yates added.
Credit Suisse’s top stock picks are Outperform-rated American Airlines, Delta, Southwest and United Continental.
Disclosure: The author holds no position in the stocks mentioned.
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