Swiss bank UBS (UBS) has initiated coverage of the U.S. airline sector with Buy ratings on all the major carriers as it turns bullish on travel for 2026.
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Analyst Atul Maheswari writes in a note to clients that revenue per available seat mile is poised to improve in 2026 after two difficult years coming out of the Covid-19 pandemic. He adds that UBS has taken a broadly “favorable view on airlines for 2026” and expects “some airline stocks should generate strong returns.”
To that end, UBS placed Buy ratings on American Airlines (AAL), Delta Air Lines (DAL), United Airlines (UAL), and Alaska Air (ALK). The one exception was struggling airline JetBlue (JBLU), which UBS hit with a Sell rating.
Tailwinds for U.S. Airlines
UBS cites several tailwinds for U.S. carriers heading into the new year. “Supply discipline is persisting & cost pressures are set to moderate,” writes Maheswari, adding that airline stocks also appear “under owned compared to this time last year.”
Giving a boost to travel next year will be a resilient U.S. economy, which UBS expects to grow 1.7% in 2026, with higher-income consumers continuing to benefit from the wealth effect tied to the stock market. The bank is particularly bullish on American Airlines, arguing that the market is “not fully appreciating AAL’s opportunity” to grow profits as corporate travel improves.
UBS estimates that AAL stock could rally 30% to 35% over the next 12 months.
Is AAL Stock a Buy?
The stock of American Airlines has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on six Buy, seven Hold, and one Sell recommendations issued in the last three months. The average AAL price target of $15.60 implies 2.50% upside from current levels.
