Out Fox The $treet

Update - Jan. 6, 2025 American Airlines gets a couple of big upgrades including TD Cowen with a $25 PT. As usually, the analysts waited until the stock was at multi-year highs.  -Shares of American Airlines (NASDAQ:AAL) are getting a lift early Monday as TD Cowen and Jefferies both upgraded the stock to Buy from Hold with Cowen raising its target price to a street high of $25. -American’s (AAL) strategy to focus on its short-haul network that is “ideally” served by its regional fleet offers connectivity to its carrier’s Sun Belt hubs and benefits its international network, a stark difference from other carriers that focus on their large, coastal hubs, Jefferies analyst Conor Walters writes in Monday’s research note. -“Ongoing corporate share recapture, lower capacity and [capital expenditures] and a new [credit card deal with Citigroup] means American (AAL) could see significant surprise to the upside in 2025 against a rationalizing industry backdrop,” Walters adds. Original articl...

American Airlines guided to strong Q2'22 results including record revenues. The airline has easily overcome fuel prices up 60% due to much higher TRASM. Most analysts remain neutral or bearish on the stock providing plenty of catalysts for higher prices. The stock trades at just 5x normalized PE estimates as debt is repaid over the next few years. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.     Learn More »   After guiding to blowout numbers going forward,  American Airlines Group  ( NASDAQ: AAL ) saw a mostly tepid reaction by the stock market. The consensus view isn't even bullish on the airline despite trading at the year lows. My  investment  thesis  remains very Bullish on this and stock and the general airline sector. Read the full article on Seeking Alpha.  Disclosure: Long AAL. Please review the disclaimer page for more details. 

Amazingly, Seeking Alpha is unable to find another Bull to highlight their view on American Airlines (AAL) . All of the other contributors on the financial site pretty much think the airline is going bankrupt. When just about every so-called financial expert is on the same side of a trade usually the opposite happens. Passenger traffic continues to rebound in the best signal the market will return to normal by next year. More research: American Airlines: Stop The Bankruptcy Talk Disclosure: Long AAL. Please review the disclaimer page for more details. 

Summary American Airlines reported Q314 earnings. The stock is a strong buy. The investment thesis anticipated short-term issues in Q3 to subside and provide for big gains in 2015 on the sliding fuel prices. Before the market open, American Airlines Group (NASDAQ: AAL ) reported record Q314 earnings. The numbers even beat analyst estimates, but the numbers were highly disappointing compared to expectations when the quarter started. This scenario further highlights how the airline industry is in a more favorable environment with tailwinds easily offsetting short-term issues. Read the full article at Seeking Alpha. Disclosure: Long AAL. Please review the disclaimer page for more details. 

Interesting video from American Airlines (AAMRQ) uploaded to YouTube saying the merger is "cleared for takeoff". Anybody following this blog knows that Stone Fox Capital has been bullish on this merger with an investment in US Airways (LCC) . As the largest airline in the world, the new American Airlines Group (LCC ) should eventually claim the largest valuation as well. Disclosure: Long LCC. Please review the disclaimer page for more details. 

Unfortunately it doesn't appear that The Street video can be embedded, but it is very interesting to see the CEO of JetBlue (JBLU) make it clear that he wants access to the Reagan National airport. Remember that the Reagan National airport slots dominated by US Airways (LLC) and American Airlines (AAMRQ) are prime reasons for the DOJ lawsuit to stop the merger. It is clear that it would be very easy to transition some airport slots away from that merged entity in favor of JetBlue and probably just about every other domestic airline. The DOJ lawsuit just doesn't hold water as any airport that becomes non-competitive will quickly attract further airlines. See the video here . Disclosure: Long LCC. Please review the disclaimer page for more details. 

With all of the debates regarding the US Airways ( NYSE: LCC     ) merger with American Airlines ( NASDAQOTH: AAMRQ     ) , the market has missed the strong results of US Airways as a stand-alone company. Though the airline might need the merger to compete equally with the other major carriers, US Airways appears poised for better days regardless. The companies originally announced the merger back in February, but the Department of Justice (DOJ) shocked the markets by filing to block the merger in August. The stock plummeted on fears that the inability to further consolidate the industry would lead airlines to the price wars of the past. The August data doesn't suggest that scenario is actually occurring, or will occur. Read the full article here . Disclosure: Long LCC. Please review the disclaimer page for more details. 

The shocking suit to block the AMR Corp ( AAMRQ.PK ) and U.S. Airways ( LCC ) merger roiled the market, sending Delta Air Lines ( DAL ) tumbling 7%. While a big part of the incentive for buying airlines has been the benefits of industry consolidation, it doesn't appear that the Department of Justice blocking this merger will prevent the intent of reduced competition. Over the last few years, the airlines appear more cognizant that focusing on profits is paramount over increasing competition. Does blocking this merger change that incentive? Ultimately, all of the airlines can probably be bought outside of American Airlines, whether based on the potential for further consolidation in the smaller, regional airlines or the potential that the third largest airline, American, struggles to emerge from bankruptcy. Delta could ultimately be the biggest beneficiary, as the airline won't face strong competition from the combined entity allowing it and United Airlines to...

According to the recent monthly results , bankruptcy has been good to AMR Corp. (NASDAQOTH: AAMRQ.PK ) . The company just reported a dramatic turnaround from last year for May and should signal that the combination with US Airways (NYSE: LCC ) will be a very profitable one. The airlines expect to finalize the merger in the next few months, which will lead to numerous synergies estimated at around $1 billion. Apparently though, the more » Disclosure: No positions mentioned. Please review the disclaimer page for more details.

While  Delta Air Lines ( DAL )  is set to become the world's 3rd largest airline when  U.S. Airways Corp. ( LCC )  and  AMR Corp ( AAMRQ.PK ) complete a merger later this year, the company could be set to profit the most from a slew of airlines mergers. In essence the domestic airlines market will become a three-headed monster with  United Continental Holdings ( UAL )  also competing for the top spot. Delta Airlines has already integrated a major merger with Northwest Airlines and stands to benefit from the other two market leaders struggling to complete the integrations of major mergers. United Airlines and Continental Airlines are still working through integration issues from a merger finalized already. In addition, Delta is working to finalize the purchase of Pinnacle Airlines out of bankruptcy. The deal has several plans that reduces costs and increases the focus on profitable routes which is refreshing for this industry. All of these mergers...

After decades of losing money and bankruptcies to all the major players, the industry may have finally consolidated enough to reach consistent profitability. The big signal might have been the AMR Corp (NYSE: AAMRQ) bankruptcy back in November. With the parent of American Airlines finally succumbing to reorganization and a merger with U.S. Airways (NYSE: LCC ) , the industry might have all the major players on board for a profitable more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Below is great picture from a TulsaWorld article of the continual losses by American Airlines parent AMR Corp (AMR). In good years, AMR makes a decent profit. In bad years, AMR has crushing losses. Even worse is the fact the losing years outweighed the good years 8 to 3 accumulating in a net loss of roughly $10.5B. How has this company even survived? AMR recently made the historic aircraft order that some say was needed to survive. Sure it makes them more competitive, more appealing to customers, but how are they going to pay for the planes. Per my recent article , still see the airplane lessors  as the winners. Companies like AerCap Leasing (AER) will continue to benefit from major airlines that need new fuel efficient planes to compete, but can't afford to buy them.  This quote sums it up the best: "American can't really afford to do this, but they cannot afford not to do it," said Robert Herbst, industry analyst and founder of AirlineFinancials.com. "...

Typically buyout news can be very bullish for the industry and competitors of the firm bought. Potentially less focused competition or even a higher premium for stand alone operators can be very positive. In the case of the airlines, that usually isn't the case. As soon as one airline leaves, another usually is born to take their place. Despite being a long term losing industry, airlines seem to never lack for new entrants. Today's news that Southwest Airlines (LUV) is willing to buyout AirTran (AAI) for a roughly 69% premium is huge for shareholders of both companies and especially AAI. This deal allows LUV to more effective compete in the NorthEast not to mention to enter markets such as Atlanta. Does that make JetBlue (JBLU) or American Airlines (AMR) an attractive acquisition now that one competitor is gone? Hmm, more and stronger competition from LUV doesn't seem ideal. The headline of their press release says it all " Southwest Airlines to Acquire AirTran; Spre...

Listening to CNBC [Airline Profits Take Off] this morning and there feature on the airlines makes me think its about time to go short. Anytime people get bullish on them its time to get out or go short. US airlines have historically lost money and nothing has stucturally changed. Sure they charge a bunch of extra fees now, but that only offsets the lower ticket prices. There biggest issues continue to be that everybody wants into the industry and every time CNBC does a feature on profits the unions automatically line up for their portion. Airlines can lose billions for 5 straight years and the unions will want new contracts the year they make $50. Reading through this article in the Ft Worth Star-Telegram just reminds me of the reasons you don't want to invest in domestic airlines. The CEO and upper management of American Airlines (AMR) is heavily engaged in discussing contracts with the various unions instead of working on developing and implementing a profitable growth plan. A...