Morgan Stanley remains a buyer of American Air after Q4 guidance raise

Morgan Stanley analyst Ravi Shanker reiterated an Overweight rating and $18 price target on American Airlines (AAL), saying the firm would be buyers of the stock following the announcement of the much-awaited new co-brand agreement and higher Q4 guidance. While the stock has rebounded from its August lows to mid-teens Thursday, the recent announcements put the stock firmly on a path to $2-$3 normalized EPS, implying a $20+ bull case, the analyst tells investors in a research note. The firm added that the guidance raise should be a “shot in the arm” for the airlines space as a whole.