Dahlman Rose Reiterates Buy Rating on US Airways (LCC)

Dahlman Rose & Co. is out with a research report this afternoon, where it reiterates its Buy rating on U.S. Airways Group LLC LCC; it has a $14.00 price target on the stock. The Dahlman analysts cited a recent update of guidance by company management. Management continues to be disciplined with capacity growth, with mainline expected to be up 1%, domestic capacity down 1% and international capacity up 8%. Fuel prices are now expected to be in a range of $2.15 - $2.20, down slightly from previous guidance. Operating expenses excluding fuel is expected to be flat to down 2%, previous guidance was down 1% to up 1%. The analysts said, “As a result of management's updated guidance, we have tweaked our EPS estimates. For 3Q10, we now estimate EPS of $1.13, up from our previous estimate of $1.06. For 4Q10, we now estimate EPS of $0.31, down from $0.38, due to higher projected fuel prices. Our 2010 and 2011 estimates remain unchanged at $2.28 and $2.61 respectively. We are reiterating our Buy rating and price target of $14.”