Evercore ISI Upgrades American, Spirit Airlines

Evercore ISI analyst Duane Pfennigwerth upgraded Spirit Airlines Inc SAVE to Outperform from In-Line and a price target of $28, an upside of 19%.
Pfennigwerth says Spirit shares have declined over 40% since late April, over which time the FY22 consensus EPS forecast has moderated from over $2 per share to 30c.
While noting "it will take some time to work out," Pfennigwerth said he will "take the over."
Pfennigwerth believes, following Spirit Airlines' challenges this summer, it will likely take a more conservative approach to future peak periods until productivity normalizes. He expects company execution and demand to improve.
Duane Pfennigwerth upgraded American Airlines Group Inc AAL to In-Line from Underperform with a price target of $17, a downside of 6.8%.
Pfennigwerth mentions, the shares have declined 15% since Thanksgiving. His thesis on the airlines is that the pandemic will eventually end and that behavior will normalize.
The analyst says, while American has a heavier net debt profile than its peers, it also has a lower cap-ex spending plan over the next three years, and net debt should decline when cash generation improves.
Price Action: SAVE shares are trading higher by 9.73% at $23.58, and AAL higher by 9.69% at $18.23 on the last check Monday.