American Airlines uses credit lines to provide money, analyst downgrades stocks for sale

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A submission showed that the distressed airline American Airlines (EEL) has now accessed a total of $ 2.73 billion from three revolving credit facilities to deal with the coronavirus fallout. The company has now borrowed the full $ 450 million from a facility in April 2016, $ 750 million from a 2013 revolver, and $ 1.53 billion from a 2014 lathe. “Data-reactid =” 12 “> A submission showed that the distressed airline American Airlines (EEL) has now accessed a total of $ 2.73 billion from three revolving credit facilities to deal with the coronavirus fallout. The company has now borrowed the full $ 450 million from an April 2016 facility, $ 750 million from a 2013 revolver and $ 1.53 billion from a 2014 revolving facility.

At the same time, Stifel Nicolaus analyst Joseph DeNardi downgraded his AAL share rating from Hold to Sell. He has a target price of $ 13 for the stock (22% upside). Stocks have dropped 63% since the beginning of the year, down 31% over the past five days, and DeNardi believes the outlook for AAL is particularly worrying.

“The bearish scenario is happening,” the analyst told investors. Air traffic could be halted this summer due to the coronavirus pandemic. He believes that AAL could emerge from the crisis as a much smaller player with reduced capacity and routes.

For AAL, one possible source of income is the monetization of airline miles programs. According to DeNardi, this could bring in about $ 4 billion for American Airlines. However, the analyst warned, “If airlines are serious about pre-selling miles, we’ll know things are particularly bad.”

If we take a step back, we can see that the stock has a hold consensus rating for TipRanks. Six analysts advise investors to sell AAL in the past three months. This corresponds to 5 hold ratings and only 3 buy ratings that were published in the same period. The average price target for analysts is $ 19. (See AAL’s stock analysis on TipRanks)

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Related messages:
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