Credit Suisse First Boston upgraded AMR Corp. (AMR) to outperform from neutral.
Analyst James Higgins says he's much more comfortable with the liquidity outlook for American Airline parent AMR after it provided its second-quarter cost guidance Wednesday night that was 5% better than his prior estimate. Higgins narrowed the $3.60 second-quarter loss estimate to a $1.95 loss, and reduced the $15.50 2003 loss estimate to an $11.50 loss.
He says the improved cost outlook, and the assumption of some sequential revenue improvement from the depressed second quarter, suggests a 2003 cash balance of $1.4 billion to $1.5 billion, which should provide AMR with enough cushion above the $1 billion required by debt covenants to substantially reduce the odds of a bankruptcy filing. Higgins has an $18 target.