In a welcome move, American Airlines Group saw its Relative Strength Rating rise from 67 to 73 on Wednesday. The rating upgrade comes as the airline continues to put up dazzling numbers, including earnings growth ranging from 102% to 182% over the last four quarters. American Airlines stock rose Wednesday.
Last quarter, American's earnings rose 153% to $1.92 per share. Revenue growth has been strong over the past year too, rising 50%, 40% and 37% through the first quarter of this year. Last quarter its sales grew only 5% year over year. That was in part due to a tough comp vs. the same quarter a year earlier.
American Airlines Stock Taxis Toward Benchmark Rating
Meanwhile, the 73 Relative Strength Rating shows that the Fort Worth, Texas-based airline tops 73% of all stocks regardless of industry when it comes to price performance. It's a good but not yet great rating. CAN SLIM investors look for a higher rating. Research shows that the market's biggest winners tend to have an RS Rating north of 80 in the early stages of their moves. See if American Airlines stock can continue to show renewed price strength and clear that threshold.
Among its other ratings American Airlines stock has a decent 79 Composite Rating. An 82 Earnings Per Share Rating reflects its strong profit growth this past year. On the plus side, the airlines group as a whole has an outstanding A- Group Relative Strength Rating, on an A-to-E scale with A tops.
However, there is one yellow flag. American Airlines stock has a D- Accumulation/Distribution Rating. That shows that big funds are mostly holding off investing in the airline yet. However, interest is rising. The number of funds holding shares of American rose from 716 in December to 759 in March and 819 in June.
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Can American Break Out From Cup With Handle?
Looking at a daily chart in MarketSmith shows that American Airlines stock began forming a long cup base in April 2022. It bottomed at 11.65 intraday on Oct. 3 as the bear market was ending. Then it began climbing, forming the right side of the cup. It rose to 19.08 on July 13 and began forming a handle. Wednesday it traded around 15.80, down for the day. See if American can break out of the base in high volume trading.
American Airlines stock earns the No. 6 rank among its peers in the 20-stock Transportation-Airline industry group. Delta Air Lines and United Airlines are also among the group's highest-rated stocks.
As you try to find the best stocks to buy and watch, one key metric to watch is a stock's price strength relative to other stocks.
IBD's proprietary RS Rating identifies market leadership by using a 1 (worst) to 99 (best) score that shows how a stock's price action over the last 52 weeks compares to the rest of the market.
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