Barclays Cuts Price Targets for UAL, DAL, AAL Amid Rising Energy Costs
Barclays has cut its price targets for United Airlines (UAL), Delta Air Lines (DAL), and American Airlines (AAL) due to higher energy costs, but still maintains an 'Overweight' rating on all three carriers.
The firm's analyst, Brandon Oglenski, reduced his price target on UAL to $160 from $175, on DAL to $95 from $105, and on AAL to $14 from $19. This move comes as oil prices surge above $100 a barrel, threatening airline margins.
Oglenski sees strong revenue growth supporting higher margins if fuel prices ease. He notes that the setup points towards a 'structurally higher margin potential if energy markets return to pre-war levels.'
The airlines' shares have been under pressure since August, with UAL and AAL stocks declining 1% and 15%, respectively, while DAL stock has gained 15% this year.