UPDATE 1-Lehman downgrades U.S. airlines sector to neutral

Thu Mar 20, 2008 8:45am EDT

 (Adds details)
 March 20 (Reuters) - Lehman Brothers downgraded the U.S.
airlines sector to "neutral" from "positive," saying the
market's acknowledgement of substantial earnings risk over the
next several months was likely to lead to choppy trading.
 The brokerage said the energy markets had not projected any
relief and that the bigger risk to estimates was fuel prices,
not recession.
 Lehman downgraded AirTran Holdings Inc AAI.N and US
Airways Group Inc LCC.N to "equal weight" from "overweight."
 The brokerage also cut its price targets on several
airlines, including Continental Airlines Inc CAL.N, Delta
Airlines Inc (DAL.N) and Northwest Airlines Corp NWA.N
 The following table lists Lehman's price target changes on
nine U.S. airlines. AIRLINES                   RIC        
PRICE TARGET (in $)
                                     New     Old AirTran
Holdings Inc      AAI.N       7.50   12.00 Alaska Air Group
Inc      (ALK.N)      17.50   27.00 Continental Airlines Inc 
CAL.N      19.00   25.00 Delta Air Lines Inc       (DAL.N)   
  14.00   22.00 JetBlue Airways Corp      (JBLU.O)      7.00  
10.00 Northwest Airlines Corp   NWA.N      11.00   18.00
Southwest Airlines Co     (LUV.N)      13.50   15.50 UAL Corp  
            UAUA.O     23.00   38.00 US Airways Group Inc 
 LCC.N      11.00   29.00
 (Reporting by Biswarup Gooptu in Bangalore; Editing by Himani
Sarkar)


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