Lehman Cuts AMR, Airline Sector
Tues, October 1, 2002
CHICAGO, Oct 1 (Reuters) - Lehman Brothers airline analyst Gary Chase on Tuesday cut his rating on AMR Corp. (NYSE:AMR - News), parent of American Airlines, and on the airline sector at large, except for Southwest Airlines (NYSE:LUV - News), which he raised.
Chase cut AMR to "underweight" from "equal weight" but raised Southwest to "overweight" from "equal-weight."
He changed his rating on the overall airline sector to "neutral" from "positive."
Shares of major U.S. airlines have undergone a freefall this year, with many trading in the single digits as travel demand remains lower and fares, cheap.
"We believe that downside risk in major airline shares is limited over the next several months as the sector appears oversold," he said. "However, we see little in the way of near-term catalysts to clear up the tremendous uncertainty facing the industry. Against that backdrop, we believe that a sustained rally in major airline shares is unlikely before late 2003."
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