A recent technical issue causing delays may irk airline passengers, but American Airlines stock is unlikely to see much of a long-term effect, regardless of how the holidays play out for travelers.
A one-hour halt of all American Airlines flights sent shares of the stock lower on Tuesday, Christmas Eve and a peak travel time in the U.S. The airline blamed a technology issue caused by a vendor which operates its dispatch and coordination system. The groundstop, as such incidents are called, was lifted Tuesday morning, before the stock market open.
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While the moves may sound dramatic for the stock, the results are anything but. American Airlines stock dipped in morning trades before edged up to 17.35, the best close since Dec. 12. Tuesday was a shortened trading day due to the Christmas holiday.
Steady But Boring: American Airlines Stock Holds Through Disruptions.
Disruptions to peak travel times are often not enough to disturb travel investments like American Airlines stock. But likewise, the growth may not necessarily be there for investors. "The airline business in general, it's just such a tough business, you're not going to find much growth in it unless you're kind of a newer airline," Irusha Peiris, portfolio manager at O'Neil Global Advisors and analyst for William O'Neil and Company told Investor's Business Daily.
"Unless you've got a newer airline, like I remember JetBlue in the past, and Spirit Airlines once upon a time did really well," Peiris told the "Investing with IBD" podcast. There is some potential growth in "some of these newer kinds because they're trying to be a little bit more innovating and things like that," he said.
Commercial carriers like American Airlines stock tend to be steady and stable, but offer limited returns for investors over time. American Airlines stock is ranked No. 8 in the Transportation Airline Group and holds a Composite Rating of 70, according to IBD Research.
However, airline stocks are surging to close out 2024, with AAL stock up more than 50% so far in the fourth quarter.
Tap here to learn how to look for signals of change in the market with Irusha Peiris.
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