Bond.az reports FedEx Freight Holding Company Inc. (NYSE:FDXF) will replace American Airlines Group Inc. (NASDAQ:AAL) in the Dow Jones Transportation Average (DJTA), effective before market open on Monday, June 1.
The change follows FedEx Corp.’s (NYSE:FDX) planned spin-off of FedEx Freight, expected to close on June 1. FedEx Corp. will remain in the DJTA.
American Airlines currently holds a weight of less than 0.5% in the index due to its low share price of $14.92 and market cap of $9.88 billion. Bond.az analysis suggests the stock is overvalued.
S&P Dow Jones Indices will adjust the divisor used to calculate the index prior to the June 1 open. The new divisor will be available on May 29.
FedEx Freight operates in cargo ground transportation, while American Airlines is in passenger airlines.
In other news, American Airlines maintains its full-year profit outlook despite rising fuel costs. CEO Robert Isom cited strong revenue and premium demand. The airline plans to install Starlink Wi-Fi on over 500 aircraft starting in 2027.
UBS raised its price target for American Airlines shares to $18 from $16, maintaining a Buy rating.
