US Airways new 52-week high on upgrade


Aug 31, 2005
US Airways New 52-Week High on Upgrade
Monday April 24, 2:26 pm ET
Analyst Upgrade Boosts US Airways Stock, Airline Stocks Take Off

NEW YORK (AP) -- US Airways Group Inc. stock rose $3.52, or 9.3 percent, to a new 52-week high of $41.25 in afternoon trading Monday, after an analyst upgraded the company on predictions of strong revenue growth.

Bob McAdoo, an analyst with Prudential Equity Group LLC, wrote in a research report that he expects US Airways to make $6.45 profit per share this year, up from his previous estimate of 73 cents per share, excluding some one-time costs. McAdoo upgraded US Airways to "Overweight" from "Neutral Weight" and boosted his price target for the stock to $48 from $40.

The stock jumped $3.37 Monday afternoon to $41.10 on the New York Stock Exchange. It began trading in September after US Airways left Chapter 11 bankruptcy protection. Its previous high was $40.75.

The stock led a strong afternoon for airlines, with Continental Airlines Inc. rising $1.77, or 7.4 percent, to $25.69 and American Airlines owner AMR Corp. rose $1.28, or 5.7 percent, to $23.74.

McAdoo predicts a first-quarter profit of 10 cents per share for US Airways, versus previously forecasting $1.73 loss, excluding costs related to its merger with America West Holdings Corp. Analysts, on average, are expecting a loss of 48 cents per share, according to a Thomson Financial poll.

McAdoo said US Airways' lower costs and improved revenue will drive the improvement, even in the face of high oil prices.

A number of airlines have posted improved revenue numbers this quarter, as fare increases designed to offset higher fuel prices kick in. Both AMR and Continental have reported operating profits for the first quarter.

Even if oil prices rise farther, US Airways will likely be able to compensate by hiking fares, McAdoo said. Fare increases likely won't hurt demand much, as it takes only a 3 percent fare increase to offset a $7 increase in crude oil, McAdoo said.

The analyst also wrote that he is "pleasantly surprised" with the lack of major problems as management merges US Airways' primarily East Coast network with America West's West Coast routes.

Analyst upgrades LCC stock
US Airways stock up on profit talk
Shares rise 11%, reach new high

Dawn Gilbertson
The Arizona Republic
Apr. 25, 2006 12:00 AM

Investors who poured a half-billion dollars into the America West-US Airways merger a year ago were greeted more than a few times with a head-shaking "What are you thinking?"

Today, they look positively prescient. Shares of the new US Airways, strong since their debut, got another lift Monday.

The stock rose 11.1 percent, or $4.17 a share, to a new high of $41.90 on a dip in oil prices and an analyst upgrade. advertisement

All airlines enjoyed the rally, but US Airways' gain led the pack.

The airline is posting the best revenue gains in the industry as a result of higher ticket prices and full flights and has said it expects a profit this year, excluding merger expenses.

Its first-quarter results aren't due until May 9, but at least one analyst says the airline could post a profit.

Prudential Securities Analyst Bob McAdoo raised his rating on the stock and changed his forecast from a quarterly loss to a profit. The consensus estimate is for a loss.

US Airways' stock is now more than double its initial public offering price of $19.20.

The biggest winners by far are the early investors in the merger, the firms that placed the biggest bets on an industry not known for its profits.

PAR Investment Partners, a Boston-based hedge fund, got in at $15 a share. At Monday's closing price, its initial shares are up 179 percent.

PAR, which did well on a big bet on America West after Sept. 11, 2001, hasn't sold any shares. It has scooped up even more, buying 2.75 million from other merger investors this month at prices ranging from $34.84 to $38.60. It now owns 13.5 million shares, or 16.6 percent of the outstanding common stock.

In his report, McAdoo said the insider buying adds "a degree of confidence in our positive outlook for US Airways." :)

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