Ahead of the Bell: Soleil cuts estimates on 4 airlines
NEW YORK—A Soleil-Solebury Research analyst slashed estimates and price targets on four airlines Monday, as crude prices rose higher and consumers appeared likely to fly less.
Analyst James M. Higgins's changes come after oil touched a high just under $120 a barrel in overnight trading.
He dropped his price target on Continental Airlines Inc. to $30 from $32 and cut his 2008 outlook to $3.50 per share loss from $1.85 per share loss.
Analysts polled by Thomson Financial expect, on average, a loss of $2.04 for the year.
Continental will likely maintain a high level of liquidity this year, said Higgins, who kept a "Buy" rating on the shares. The changes come the day after Continental said it had no immediate plans to consolidate with another airline after rumors it was in talks with UAL Corp., parent of United Airlines.
Higgins cut his price target on UAL Corp. to $30 from $37, but kept a "Buy" rating. For the year, he now expects a loss of $10.75, compared with a previous estimate for a $6 loss and analysts' $7.23 loss expectation.
For America Airlines parent AMR Corp., Higgins lowered his 2008 outlook to a loss of $8 per share from a loss of $7.50 per share, below other analysts' average estimate for a loss of $5.15 per share.
He kept his $9 price target and "Hold" rating.
Higgins changed his price target for Alaska Air Group Inc. to $22 from $26 and his 2008 outlook to a loss of 65 cents per share from a profit of $2.05 per share. Wall Street's average estimate is 32 cents per share profit.
As with other airlines, competition and fuel costs are a concern of Alaska Air, but liquidity is very strong, said Higgins, who kept a "Hold" rating on the shares.
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