On Friday, TD Cowen maintained a Hold rating on American Airlines (NASDAQ: NASDAQ:AAL) while raising the price target from $9.00 to $10.00. The adjustment reflects the integration of the airline's third-quarter results, its fourth-quarter guidance, and refined projections for the years 2025 and 2026.
The analyst noted American Airlines' ongoing efforts to reclaim its share of the managed corporate market and mentioned the potential benefits of a small and medium-sized business (SMB) program. Additionally, a forthcoming credit card agreement expected in 2025 is anticipated to positively influence financial estimates.
Despite the upgrade in the price target, the analyst expressed caution due to long-term strategic questions that persist, particularly regarding the airline's international long-haul routes, which continue to be a significant source of revenue.
The new price target of $10.00 is based on a 5.9 times multiple of the company's projected 2025 enterprise value to EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs), a common financial metric used to assess a company's value.
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