Barclays Slashes Price Targets on UAL, DAL, AAL Amid Soaring Fuel Costs
Barclays has reduced its price targets for United Airlines (UAL), Delta Air Lines (DAL), and American Airlines (AAL) due to higher energy costs. The firm's analyst, Brandon Oglenski, cut his price target on UAL to $160 from $175, on DAL to $95 from $105, and on AAL to $14 from $19, while maintaining 'Overweight' ratings on all three carriers.
The price cuts come as oil prices surge above $100 a barrel, causing fuel costs to rise. Despite the decrease in price targets, Oglenski believes that strong revenue growth could support higher margins if fuel prices ease.
The current pressure on airline profits is temporary and should not be a concern for long-term investors, according to Oglenski. He points out that carriers continue to post yield gains despite the headwinds from fuel costs.