Now that oil has fallen $30 from its record highs and most airlines have cut capacity, Lehman thinks the sector is ripe for gains. The firm has raised its estimates and targets across the board.
The logic makes sense (although we do recall at least one major airline CEO explaining that the industry was toast at $120 oil). If oil keeps falling, sure there might be some upside in the airline sector. But if oil is falling because of an impending global recession, is that really going to drive the airline stocks to the stars?
Lehman’s new targets:
Detla (DAL) target raised from $8.50 to $18
JetBlue (JBLU) target raised from $5.50 to $9
Northwest (NWA) target raised from $10 to $19
United Airlines (UAUA) target raised from $16.50 to $26
AirTrain (AAI) target raised from $4 to $4.50
Alaska Air Group (ALK) target raised from $17 to $28
American Airlines (AMR) target raised from $7.50 to $22
US Airways (LCC) target raised from $4 to $12
Continental (CAL) target raised from $9.50 to $2
Airline Industry: Don’t Believe The Bulls–We’re Still Screwed (DAL, CAL, UAUA, AMR, LCC, LUV)
United Airlines (UAUA) Pilots Want To Shove CEO Out Of Plane (UAUA)
Next on American Airlines (AMR) Chopping Block: Frequent Flier Miles (AMR)
US Airways (LCC) CEO: If Oil Stays at $120, Only The Rich Will Fly (LCC, DAL, CAL, UAUA, AMR)
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