American Airlines Group Inc (NASDAQ: AAL) is up 10% on Monday after a Morgan Stanley analyst issued a super bullish note in its favour.

Ravi Shanker upgraded the air carrier today to “overweight” and said its shares could hit $20 by the end of this year that suggests about a 40% upside from here.

The analyst recommends owning American Airlines stock for an improving balance sheet. Shares will continue to benefit from strong post-pandemic execution as well, he added.

The Fort Worth-headquartered airline is expected to earn 5 cents a share in its current financial quarter versus $1.17 per share a year ago, as per Zacks Investment Research.

Note that the last time $AAL traded at above $20 was in April of 2022.

Ravi Shanker agreed that American Airlines have been weighed for quite some time as it made its way through a bunch of “black swan events”.

Talks of a recession also served as a headwind for the Nasdaq listed company last year. Still, the Morgan Stanley analyst remains convinced that it’s entering 2024 “looking to settle several scores”.  

Shanker expects momentum in shares of the U.S. airlines from December to continue in the new year as well on the back of resilience in fundamentals. On Monday, Morgan Stanley also restored peer Delta Air Lines Inc as its top pick in this sector.

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