American (AMR), the only one of the big three carriers not to make a deal recently, is plagued by relatively high labor costs and was the only major carrier to lose money in the second quarter. It is, however, expected to show a third-quarter profit. Its shares are down about 17% this year.
Nevertheless, JPMorgan analyst Jamie Baker has a $12.50 price target and an overweight ranking on the shares. Responding to recent revenue per available seat mile guidance that was below expectations, Baker said he expects "gradual strengthening" because American expects a $500 million increase in annual income from joint ventures across the Atlantic and, pending approval, the Pacific.
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