• hello@whatnews.in
  • Home
  • Business
  • World
  • Contact US
Home»business»Stop selling American Airlines stock as it remains ‘heavily shorted,’ analyst says
business

Stop selling American Airlines stock as it remains ‘heavily shorted,’ analyst says

whatnewsBy whatnewsMarch 17, 2023No Comments3 Mins Read
Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
Share
Facebook Twitter LinkedIn Pinterest Email


Shares of American Airlines Group Inc. have tumbled enough in the past week and long-time bearish analyst Scott Group at Wolfe Research said it was time to stop selling.

Scott raised his rating on the Texas-based air carrier to peer perform, after being at underperform for at least the past three years. He removed his stock price target, while his prior target of $14 had made him the most bearish of the 22 analysts surveyed by FactSet.

His upgrade comes after the stock
AAL,
-1.35%

tumbled 14.9% over the past six sessions to close Thursday at $14.12, or just a fraction above his prior target. That compares with an 11.6% drop in the U.S. Global Jets exchange-traded fund
JETS,
-1.85%

and a 0.8% loss in the S&P 500 index
SPX,
-0.48%

over the same time.

And despite this recent selloff, short interest, or bearish bets on the stock, remains relatively high.

“[American’s stock] remains heavily shorted with a 10% short interest, but it’s been consistently executing and making/beating estimates in recent quarters while running a fairly clean operation,” Scott wrote in a note to clients.

The company has been profitable the past three quarters, and has beat bottom-line expectations in seven of the past eight quarters.

Short interest, or the number of shares shorted, represents 9.77% of the public float, or shares available for public trading, according to the latest exchange data. That compares with 3.41% for Delta’s stock and 4.39% for United shares.

Some on Wall Street view high short interest as a bullish sign, as those who have made those bets will have buy back the stock if it starts rallying, an action referred to as short covering. The “meme-stock” craze had involved heavily shorted stocks. Read more about how short selling works.

In addition, Scott said that while American Airlines still carries a high debt load, he believes the company will significantly reduce its debt this year given his expectation that free cash flow will exceed $2 billion in 2023.

And one reason for his previous bearish stance was that American’s margins had previously “badly and consistently” lagged that of rival Delta Air Lines Inc.
DAL,
-2.67%
,
and also “consistently lagged” that of United Airlines Holdings Inc.
UAL,
-1.19%
.

“But in recent quarters, the margin gap vs. [Delta] has clearly narrowed, while it remains choppy relative to [United],” Scott wrote in a note to clients.

American Airlines stock, which slipped 0.1% in Friday’s premarket, has rallied 10.2% over the past three months through Thursday, while the Jets ETF has tacked on 2.4% and the S&P 500 has gained 2.8%.



Source link

Post Views: 12
AAL acquisitions Acquisitions/Mergers/Shareholdings Air Transport Airlines American American Airlines Group Inc Analyst analysts' comments Analysts' Comments/Recommendations article_normal automotive C&E Exclusion Filter C&E Industry News Filter capital Commodity Commodity/Financial Market News Content Types Corporate Corporate Actions Corporate/Industrial News Dal Delta Air Lines Inc Derivative Securities Earnings equity markets Factiva Filters financial market news Financial Performance funding Funding/Capital heavily industrial news logistics Mergers Ownership Changes Passenger Airlines recommendations remains selling shareholdings shorted Stock stop Transportation Transportation/Logistics UAL United Airlines Holdings Inc
Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
Previous ArticleHere are Friday’s biggest analyst calls: Apple, Nvidia, First Republic, Whirlpool, Meta, FedEx & more
Next Article Dow falls 200 points as banking jitters remerge, SVB files for bankruptcy
whatnews
  • Website

Related Posts

Deutsche Bank shares slide 8% after sudden spike in the cost of insuring against its default

March 24, 2023

Wait for Nifty IT index to move beyond 28600 for a recovery up to 30000: Sudeep Shah

March 24, 2023

Barclays maintains Naturgy Energy at Equalweight

March 24, 2023
Add A Comment

Leave A Reply Cancel Reply

Subscribe to Updates

Get the latest sports news from SportsSite about soccer, football and tennis.

Advertisement
About Us
Privacy Policy
Contact Us
© Copyright 2023. All rights reserved.