Investing.com – American Airlines (NASDAQ: AAL) shares rose 4.5% on Monday, boosted by a series of forecasts from Wall Street analysts who cited improving traffic and a lucrative credit card partnership as reasons for their bullish forecast. Analysts at Jefferies, TD Cowen and Melius Research revised their stance on the airline to buy from suspension, citing a rebound in domestic and corporate travel as well as the benefits of American’s exclusive credit card agreement with Citigroup Inc (NYSE:).
TD Cowen’s Thomas Fitzgerald set a new price target of $25.00, up from $17.00, and said, “We are raising our rating for American Airlines Group (NASDAQ:) from Hold to Buy with a target price of $25 (8.4 times our 2025 EPS estimate).” Fitzgerald acknowledged previous misjudgments regarding the airline’s performance but now recognizes American’s strong position in the industry. He highlighted the airline’s dominance in the industry. Fitzgerald also highlighted the importance of the domestic and Latin American markets, the potential of new aircraft for international routes and the expected continued growth in premium seats and corporate travel. underestimated the impact of American’s new joint credit card deal, which it believes will support profitability well into the 2030s.
Sheila Kahyaoglu of Jefferies also upgraded shares of American Airlines to buy, setting a price target of $20.00, up from $12.00. She forecasts the airline will outperform due to factors such as distribution revenue returns and the aforementioned credit card deal, which it expects to contribute significantly to pre-tax growth by 2030.
The revamp comes as American Airlines’ domestic market improves significantly as competitors make cutbacks and network changes that increase pricing power. Analysts expect this trend to have a positive impact on American’s operating results, as well as the airline’s strategic positioning and fleet expansion.
While analyst comments provide an upbeat view of American Airlines’ prospects, investors will likely continue to closely monitor the company’s performance, especially in light of expected benefits from its credit card partnerships and evolving airline industry dynamics.
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