TD Cowen analyst Tom Fitzgerald upgraded American Airlines to a buy rating, predicting a 47% surge in stock price. Fitzgerald cites improved pricing, business travel recovery, and stronger airline credit card economics as tailwinds.
American Airlines is moving past some headwinds, TD Cowen said. Analyst Tom Fitzgerald upgraded shares of the Texas-based carrier to buy from hold. Fitzgerald also increased his price target by $8 to $25, which suggests that the stock can soar 47.3% from Friday's closing level. TD Cowen's $25 price target appears to be a new high on Wall Street, according to LSEG. Unlike Fitzgerald, the majority of analysts have a hold rating on the stock.
American 'has emerged from transitory 2024 challenges,' Fitzgerald wrote to clients in a Monday note. 'We view consensus estimates as too low given tailwinds and favorable comps through 2025.' Fitzgerald pointed to improved pricing in the Latin American and domestic markets, a return of business travel and better economics from airline credit cards as some of those tailwinds. Notably, he told clients to consider American a 'have' rather than a 'have-not' among airlines. Looking back, Fitzgerald acknowledged that his upgrade a year ago came 'too early.' The firm then downgraded shares in July, though it later became clear that American's headwinds were more 'transitory' than expected. Now, Fitzgerald said consensus estimates aren't pricing in upside potential to profit-and-loss that can be seen in 2025. Better performance can allow American to pay down debt while the stock rises, he added. Shares jumped more than 4% in Monday's premarket trading. While the stock has slightly pulled back in the new year, its gain of more than 26% in 2024 marked its best yearly performance since 2014.
AMERICAN AIRLINES STOCK UPGRADE TD COWEN TRAVEL INDUSTRY INVESTMENT
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