American Airlines Group Inc. (AAL), headquartered in Fort Worth, Texas, is a major US-based airline boasting a market cap of $9.45 billion. The company’s wholly-owned subsidiaries are American Airlines, Envoy Aviation Group, PSA Airlines, and Piedmont Airlines. Its primary business is to provide passenger and cargo services.
Shares of this leading airline carrier have underperformed the broader market considerably over the past year. AAL has gained 5.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.7%. But in 2024, the gap narrowed, with AAL stock rising 4.8%, while the SPX is up 9.5% on a YTD basis.
Zooming in further, AAL’s gains over the past 52 weeks are easily overshadowed by the U.S. Global Jets ETF (JETS). The exchange-traded fund has gained about 18.2% over this period. Moreover, the ETF’s 10% gains on a YTD basis outshine the stock’s single-digit returns over the same time frame.
AAL’s shares jumped nearly 11% after surpassing earnings and revenue expectations for the fourth quarter and providing upbeat guidance for 2024. The company earned $0.29 per share in the fourth quarter on revenue of $13.06 billion, surpassing the Wall Street estimates of $0.10 earnings per share and sales of $13.02 billion. For 2024, AAL expects adjusted earnings per share to be between $2.25 and $3.25.
For the current fiscal year, ending in December, analysts expect AAL to report an EPS decline of 4.2% to $2.54 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 one other occasion.
Among the 18 analysts covering AAL stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, six “Holds,” one “Moderate Sell,” and one “Strong Sell.”
This configuration is slightly more bullish than three months ago, with nine suggesting a “Strong Buy,” six advising a “Hold,” one giving a “Moderate Sell,” and one suggesting a “Strong Sell.”
Recently, Bernstein analyst David Vernon maintained a “Buy” rating on AAL stock with a price target of $22, implying a potential upside of 47.9% from current levels.
The mean price target of $17.12 represents a 15.1% premium to AAL’s current price levels. The Street-high price target of $24 suggests an ambitious upside potential of 61.3%.
On the date of publication, Dipanjan Banchur 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.
