Shares of American Airlines Group Inc. (AAL) surged 3.3% in premarket trading Monday, after Raymond James analyst Savanthi Syth backed away from her bearish stance on the air carrier, citing a more balanced risk-reward scenario following the recent selloff. Syth raise her rating to market perform, after being at underperform since June 5. The stock had plunged 44% from its June 8 recovery peak of $20.31 through Friday, while the U.S. Global Jets ETF (JETS) has tumbled 27% over the same time. "Our view remains that bankruptcy is not in the cards for American in 2020 with Chapter 11 only a potential avenue if the earnings recovery stalls over multiple years," Syth wrote in a note to clients. Syth said that while the risk-reward scenario is more balanced, American's is "the least appealing" of the U.S. airlines given the "materially higher debt burden," which could leave American's balance sheet "crippled for years to come." Year to date, American's stock has plunged 59% while the Jets ETF has shed 49% and the S&P 500 has edged up 0.1%. (This corrects a previous item regarding the identity of the analyst.)
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 27, 2020 09:57 ET (13:57 GMT)
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