Barclays upgrades American Airlines to Equal Weight on fading leverage

Barclays upgraded American Airlines (AAL) to Equal Weight from Underweight with a price target of $16, up from $10. The firm sees airline fundamentals “turning sharply positive” in 2025. It upgraded American to Equal Weight saying the company’s balance sheet leverage is fading, its business travel share has room to improve and the carrier will renegotiate co-brand card agreements in 2025. Barclays sees American as likely to gain back some lost share given a rollback of prior unfavorable commercial changes as well as the company’s ability to leverage a new co-brand card agreement and drive cost efficiencies given labor contracts have now all been settled.