AMR (NYSE:AMR): Potential Relief Rally Ahead - Morgan Stanley

Firm is revising their estimates and price targets lower for $105/bbl oil and Morgan Stanley’s most up to date economic forecasts. Looking forward, as their Bull/Bear/Base summary highlights, they expect significant volatility in airline equities. However, contrary to the consensus view, the firm would not initiate short positions at current prices. In fact, they believe airline equities are poised for a relief rally in the near-term and suggest that nimble investors position themselves accordingly across legacy airlines.They are still not recommending the space to long-term holders, but are on the lookout for a change in either 1) macro forecasts or 2) the potential for a “Tipping Point” catalyst.