Shares of AMR Corp., the parent company of American Airlines, jumped Monday after a Wall Street analyst upgraded his recommendation.
AMR stock (ticker: AMR) rose 63 cents, or about 5 percent, to close at $13.51 per share in trading on the New York Stock Exchange. The increase followed a report from Gary Chase, an airline analyst with Lehman Bros., predicting that shrinking capacity and a reduction in fuel prices will help the airline.
He changed his recommendation from "hold" to "buy."
Chase's report was the second positive forecast for AMR in recent days. Last week, Jamie Baker, an analyst with JP Morgan, also upgraded his recommendation to "buy."
Baker predicted that AMR could turn a profit next year, citing improvements in revenue and cost cutting.
"For a model that supposedly didn't work at $40 oil, we believe it can and will at $60," he wrote in a report to investors.
Baker also upgraded his recommendation for Continental Airlines, based in Houston.
Other airlines' stocks also improved Monday. Continental ( CAL) jumped 86 cents, or 7 percent, to close at $12.95 per share. Dallas-based Southwest Airlines ( LUV) rose 26 cents to close at $16.01 per share, JetBlue Airways ( JBLU) climbed 56 cents to close at $18.61, and US Airways Group ( LCC), parent company of US Airways and America West Airlines, jumped 78 cents to close at $24.68.
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