(Bloomberg) -- Shares of American Airlines Group Inc. are rallying on Monday after the company received a trio of upgrades from Wall Street analysts, extending the carrier’s recent hot streak.
Analysts from Jefferies, TD Cowen and Melius Research all raised their recommendation on the the Fort Worth, Texas-based airline to buy from hold, citing improved domestic and corporate traffic, as well as American’s exclusive credit card pact with Citigroup Inc. for the newfound bullishness.
“American’s recently renewed credit card agreement with Citi is expected to add at least $560 million in incremental, high margin revenue in 2025,” wrote Melius’ Conor Cunningham. “At the same time, American is working towards regaining lost corporate travel market share.”
The airline’s shares jumped 5.1% as of 1:01 p.m. during regular trading in New York.
The stock has been on a tear lately, rising over 50% in the past three months. The surge comes on the back of declining short interest, with short bets accounting for 6.5% of free float as of last week, the least since early April, according to data from S3 Partners.
Despite the recent run, many are still on the sidelines after American’s missteps on gauging domestic demand last year. American has 11 holds and two sells balanced against 13 buy ratings, according to data compiled by Bloomberg. The stock’s consensus rating — a proxy for the ratio of buy, hold and sell ratings — is sitting at the highest since early 2020, but it’s still below peers like Delta Air Lines Inc. and United Airlines Holdings Inc.
“There is further opportunity for investors to benefit from significant torque in positive earnings revisions,” wrote Tom Fitzgerald, a TD analyst who has a Wall Street-high $25 price target on American’s shares. “Improved performance will enable the company to continue paying down debt and equity owners should see their share of enterprise value rise in tandem.”
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