US Airways Stock in a free fall

[usair_begins_with_u]

Possible causes:

Significant operational deficiencies
Excessive employee benefits and wages
Failing fuel hedging strategies
Decreasing growth prospects
Increasing pressures from other transformed legacy carriers
Failure of merger to create predicted cost synergies
Increasingly bearish outlook on longer term prospects
Debt burden
Airline stocks falling out a favor on wallstreet


Which of these do you think are the key drivers? Have I missed any? As insiders, not boardroom insiders, but industry insiders, do any posters here think this stock is more likely to head to the low 30's before it reaches the $50's again? $60?? Will it ever see $60 again? If so when?

 

[Itestwell]

Possible causes:

Significant operational deficiencies
Excessive employee benefits and wages
Failing fuel hedging strategies
Decreasing growth prospects
Increasing pressures from other transformed legacy carriers
Failure of merger to create predicted cost synergies
Increasingly bearish outlook on longer term prospects
Debt burden
Airline stocks falling out a favor on wallstreet
Which of these do you think are the key drivers? Have I missed any? As insiders, not boardroom insiders, but industry insiders, do any posters here think this stock is more likely to head to the low 30's before it reaches the $50's again? $60?? Will it ever see $60 again? If so when?

I think it has to do with the new trash bags. Good thing the FA's discussed it in the latest Crew News.

 

[PHL]

Several analysts, just in the last week or two, have targeted LCC at anywhere from $66-$88. Merrill Lynch, has a buy recommendation and target of $60. JPMorgan gave it an overweight rating with a target of $70. Credit Suisse rates it outperform with a target of $79 and Prudential Equity rates it as overweight with a target of $88.

Overall, there are 12 analysts rating the stock 75% saying 'buy' and 25% saying 'hold'. They have an average target price estimate of $68.78 for 9/12.

*above info courtesy of Bloomberg*

So, the stock still looks good in Wall Street's eyes as long as your management can show numbers. The street doesn't care as much about customer ill-will as long as the numbers keep coming in strong each quarter. If that ill-will later translates to lost revenues, then the analysts will dump it faster than a bowl of cold soup.

 

[Harry Callahan]

For sure it's not benefits & wages.

 

[USA320Pilot]

Click here for one big reason.

Regards,

USA320Pilot

 

[barbeetantrums]

Doug better announce a hostile takeover of another airline PDQ! That will drive up the price! Do it for the shareholders, Dougie!

 

[FWAAA]

Click here for one big reason.

Exactly. Oil is back up and nearly every airline stock is down, some more than others.

 

[FM2436]

Maybe buyers of US Airways stock are nervous about the Democrat's vote wanting to pull the US out of Iraq and potentially surrendering nearly 60% of our economy's Middle East oil supplies into the hands of terrorists. Could be an answer.

 

[IMisstheAladdinTrays]

Maybe buyers of US Airways stock are nervous about the Democrat's vote wanting to pull the US out of Iraq and potentially surrendering nearly 60% of our economy's Middle East oil supplies into the hands of terrorists. Could be an answer.

I'm sure this must be the reason. :down: Next!

 

[barbeetantrums]

Maybe buyers of US Airways stock are nervous about the Democrat's vote wanting to pull the US out of Iraq and potentially surrendering nearly 60% of our economy's Middle East oil supplies into the hands of terrorists. Could be an answer.

Perhaps it is because shareholders see what a shabby operation we have (with no end in sight) and the CEO is a perceived lush. Look at a 1-yr graph of LCC <<http://finance.yahoo.com/q?s=lcc>> and watch the slide after the release of Dougie's drunk driving arrest. Remember that Fidelity dropped many LCC shares from its mutual funds after that incident. There was that unsuccessful bid for Delta that went t!ts up at the same time. The drunk incident and the failed Delta bid are actuaaly one and the same, IMHO. You can't speak of one without speaking of the other.

Yeah. I know. :cold:

 

[usair_begins_with_u]

http://moneycentral.msn.com/investor/chart...p;CP=0&PT=7

Doesn't look like you can blame oil that easily USA320Pilot.

 

[FlyDCJets]

Do your own homework, and take what the Brokerage Houses Analyst state with a "grain of salt" they are only looking out for there accounts and they are not experts in there sectors as you may think they are.

Regards
DC

 

[delta777]

Doug better announce a hostile takeover of another airline PDQ! That will drive up the price! Do it for the shareholders, Dougie!

Thankfully DAL's creditors saw how unpredictable airline stock can be and chose not to accept LCC's "enhanced" offer right before the deal fell thru, which included something like 90 million LCC shares. What would the deal have been worth in today's numbers with LCC stock around $42-45? Less than the original offer perhaps, and LCC be nowhere near completing the transaction. Had it been an all cash deal, perhaps things might have turned out differently. I shudder to even think of such a scenario!

 

[barbeetantrums]

Thankfully DAL's creditors saw how unpredictable airline stock can be and chose not to accept LCC's "enhanced" offer right before the deal fell thru, which included something like 90 million LCC shares. What would the deal have been worth in today's numbers with LCC stock around $42-45? Less than the original offer perhaps, and LCC be nowhere near completing the transaction. Had it been an all cash deal, perhaps things might have turned out differently. I shudder to even think of such a scenario!

Just consider yourself lucky that you didn't end up with this CEO signing your paycheck. This man has caused nothing but sorrow and heartache for his employees. Everything (and everyone) he touches turns to cr@p.

 

[Dog Wonder]

Maybe buyers of US Airways stock are nervous about the Democrat's vote wanting to pull the US out of Iraq and potentially surrendering nearly 60% of our economy's Middle East oil supplies into the hands of terrorists. Could be an answer.

An answer that makes as much sense as "Dogs bark because they like trees."