BofA raised the firm’s price target on American Airlines (AAL) to $10 from $8 and keeps an Underperform rating on the shares. Airline stocks meaningfully underperformed the market in 2023 as increasing domestic supply, cost inflation, and normalizing travel demand drove down estimates for domestic airlines, notes the analyst, who continues to see an oversupplied domestic market in 2024. The firm expects the most unit cost pressure from domestic airlines that have growth limitations such as JetBlue (JBLU) and Spirit Airlines (SAVE), the analyst added.
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