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American Airlines Group Inc. (AAL), headquartered in Fort Worth, Texas, provides scheduled air transportation for passengers and cargo across the U.S. and internationally. With a market cap of $6.98 billion, it is one of the four major carriers that dominate the U.S. aviation market, offering extensive flight networks and services to destinations worldwide.
Shares of AAL have underperformed the broader market considerably over the past year. AAL has declined 34.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 21.6%. In 2024 alone, the stock has lost 22.9%, compared to SPX's 16.7% gains on a YTD basis.
Zooming in further, AAL’s loss on a YTD basis is much higher than the U.S. Global Jets ETF (JETS). The exchange-traded fund has declined about 2.8% over this period.
AAL stock surged more than 4% on Jul. 25 following a mixed Q2 earnings report. The company reported earnings of $717 million, or $1.09 per share, surpassing Wall Street expectations of $1.04 per share. The company reported revenues of $14.33 billion, which fell short of the anticipated $14.42 billion. For the full year, AAL expects adjusted earnings per share to be between $0.70 and $1.30.
On Jul.19, American Airlines stock fell nearly 1% due to a global IT outage that delayed operations and caused flight cancellations worldwide.
For the current fiscal year, ending in December, analysts expect AAL to report an EPS decline of 63.8% to $0.96 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 18 analysts covering AAL stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, 10 “Holds,” one “Moderate Sell,” and one “Strong Sell.”
This configuration is less bullish than three months ago, with 10 suggesting a “Strong Buy.”
On Jul. 29, JPMorgan Chase & Co. (JPM) analyst Jamie Baker maintained a ‘Buy’ rating on American Airlines with a price target of $15, implying a potential upside of 41.4% from current levels.
The mean price target of $12.91 represents a 21.7% premium to AAL’s current price levels. The Street-high price target of $19 suggests an ambitious upside potential of 79.1%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
