American Airlines Replaces Allergan in S&P 500
American Airlines will be the newest addition to the S&P 500, taking the place of Allergan.
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American Airlines Group Inc. (NASDAQ: AAL) will be the newest addition to the S&P 500, taking the place of Allergan Inc. (NYSE: AGN). The change will occur after the close of trading Friday, March 20, and it will have a couple implications for the index weighting.
Allergan will be removed from the index because it is being acquired by Actavis PLC (NYSE: ACT). The transaction is valued at $66 billion or $219 per share, the exchange will happen in cash and Actavis shares. It is expected to be completed this week, after receiving approval from the European Commission.
The two other major airlines currently in the index are Delta Air Lines Inc. (NYSE: DAL) and Southwest Airlines Co. (NYSE: LUV).
Ultimately what this will mean that American Airlines’ market cap of $35 billion will move into the Transportation sector of the S&P, while Allergan’s market cap of $72 billion will move out of the Healthcare sector of the index.
Shares of American Airlines were up 5.4% at $52.93 shortly after Tuesday’s opening bell. The stock has a consensus analyst price target of $68.97 and a 52-week trading range of $28.10 to $56.20.
Shares of Allergan closed Monday up 1.2% at $240.22, in a 52-week trading range of $115.94 to $241.78. The consensus analyst price target is $219.33.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
