Rothschild Cuts American PT to $12.50, Keeps Delta Buy on Low Fuel Sensitivity
Rothschild & Co Redburn cut American Airlines to Neutral and trimmed its price target to $12.50 from $17, citing jet fuel cost hikes tied to Middle East tensions that forced earnings forecast cuts. The firm affirmed Buy on Delta and United, noting Delta’s limited fuel sensitivity as a key strength.
1. Analyst Note Details
Rothschild & Co Redburn published a client note downgrading American Airlines to Neutral and reducing its price target from $17 to $12.50. The analysts cited rising jet fuel prices driven by Middle East tensions as the primary factor prompting significant cuts to earnings forecasts for carriers most exposed to fuel cost volatility.
2. Delta’s Favorable Position
The firm maintained Buy ratings on Delta Air Lines and United Airlines, emphasizing that Delta’s network structure and hedging strategies result in lower fuel cost sensitivity. This resilience is expected to support Delta’s profit margins and cash flows through periods of elevated fuel prices.
3. Industry Outlook
Entering 2026, US carriers benefited from strong demand trends and disciplined capacity growth, but escalating fuel expenses now pose a widespread challenge. While operational disruptions remain limited, the cost headwind is reshaping profitability forecasts and valuations across the sector.