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Goldman Sachs Lifts Price Targets for 4 Largest US Airlines

As with Southwest, the second-quarter outlook brightens. Analysts estimate a net loss per share of $1.07, compared with a loss of $4.43 a year ago. The full-year loss is forecast at $2.76, an improvement of about 75% compared to a loss per share of $10.76 in 2020.

The stock trades at around $50, in a 52-week range of $17.51 to $52.28, and the consensus price target is $48.33. Goldman Sachs also raised its price target on Delta stock on Tuesday, from $35 to $47, and maintained a Neutral rating.

Delta is not expected to post a full-year profit until 2022 and currently trades at about 13 times expected 2022 earnings and just tight times expected 2023 earnings.

United

With a current market cap of around $19.2 billion, United Airlines Holdings Inc. (NASDAQ: UAL) is the third-largest U.S. carrier. At the end of 2019, the airline’s market cap was around $23 billion. Revenue collapsed by nearly 65% year over year in 2020, and the loss per share totaled $27.57.

When United reports first-quarter results late next month, analysts expect a loss per share of $6.87, compared with a loss per share a year ago of $2.57. Revenue for the quarter is pegged at $3.29 billion, a drop of nearly 59% year over year.

The second quarter looks better as analysts estimate a net loss of $3.17 per share, bringing the estimated first-half loss to $10.07. However, United’s full-year loss currently is forecast at $9.97, indicating that profitability is expected to return in the second half of the year. The forecasts for both Delta and Southwest indicate the same pattern.

United’s stock traded at above $60 Tuesday morning, in a 52-week range of $17.80 to $61.69  and with a consensus price target of $51.56. Goldman Sachs also has a Buy rating on United stock and boosted its price target from $54 to $74.

The shares trade at 18 times expected earnings in 2022 and about eight times expected 2023 earnings.

American

American Airlines Group Inc. (NASDAQ: AAL) has a current market cap of around $15.8 billion, making it the fourth-largest U.S. airline. That’s actually an improvement of about a third from its level of $11.8 billion at the end of 2019. Revenue fell 62% year over year in 2020, and American’s loss per share totaled $19.66.

When the company reports first-quarter results next month, analysts are looking for a loss per share of $3.93 on revenue of $4.05 billion. The per-share loss is about 50% worse than the quarterly loss a year ago, and the revenue total is down by 52%. Analysts expect American to post a full-year loss of $7.94 in 2021 on revenue of $25.6 billion, an improvement of about 48% year over year.

As with the other airlines we’ve looked at, the second quarter’s expected loss narrows, but the full-year outlook indicates that per-share losses will continue into the third quarter and maybe even into the fourth.

American’s stock traded at shy of $25 on Tuesday, in a 52-week range of $8.25 to $25.94. The consensus price target on the stock is $14.19. Goldman Sachs maintained a Neutral rating on American but lifted the price target from $11 to $20.

American is not expected to post a full-year profit until 2022, and the estimates range from $0.01 to $0.10. That works out to sky-high multiples. An expected profit per share of $1.91 in 2023 is about 13 times the current share price.