Schaeffer's Trading Floor Blog

Analyst Upgrades: AT&T Inc., American International Group Inc, and Southwest Airlines Co

Analysts upwardly revised their ratings on T, AIG, and LUV

by 5/6/2014 9:38 AM
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Analysts are weighing in today on telecom services provider AT&T Inc. (NYSE:T), global insurance company American International Group Inc (NYSE:AIG), and airline operator Southwest Airlines Co (NYSE:LUV). Here's a quick roundup of today's bullish brokerage notes.

  • T -- which is little changed on a year-to-date basis -- saw its price target increased to $39 from $37 at Credit Suisse this morning. Should AT&T Inc. continue its recent bounce higher -- the equity is up nearly 4% week-over-week -- additional analysts may revise their lukewarm opinions on the stock. The average 12-month price target stands at $35.57, just a stone's throw away from T's current perch of $35.76 (leaving the door open for price-target hikes in the near term). Meanwhile, 14 of the equity's 24 covering analysts maintain tepid "hold" ratings, and one offers a "strong sell" suggestion.

  • While AIG's revenue for the first quarter fell short of analysts' estimates, the company's earnings were stronger than expected, spurring Nomura to lift its price target by $3 to $53 overnight. Out of today's gate, American International Group Inc is down 2.2% to trade at $51.57, but holds on to a three-month return of 8.2%. Furthermore, option traders were upping the bearish ante on the equity ahead of the company's earnings report. In fact, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.13 ranks 2 percentage points from a 12-month peak, indicating puts have been bought to open over calls at a near-annual-high pace during the past two weeks.

  • LUV saw its price target hiked to $30 from $26 at Imperial Capital this morning, after yesterday signing a contract with Amadeus IT Group to implement a single reservation system for the airline's operations. On the charts, Southwest Airlines Co has been an unstoppable force, climbing almost 29% so far this year to its current perch at $24.32 -- just a chip shot away from its May 1 record high of $24.63. Should the stock's upward trajectory continue, the rest of its bearish skeptics could be persuaded to switch teams, which may provide the shares with an additional boost. Ratings-wise, four of the 14 covering analysts refuse to give up their "hold" or worse suggestions on the outperforming equity. Furthermore, the average 12-month price target of $25.93 is positioned just 6.9% higher than LUV's current price, signaling there is still some wiggle room for more price-target lifts.

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