American Airlines (AAL) is set to report Q1 earnings tomorrow – April 23rd. The stock is down around 24% in the year-to-date hit by the threat of higher jet fuel prices as a result of the Iran war, faltering consumer confidence and spluttering merger talk.
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According to TipRanks’ Options Tool, options traders expect about a 5.86% move in either direction in AAL stock in reaction to its Q1 results.
What Wall Street Expects
Wall Street expects AAL to post first-quarter revenues of $13.81 billion, which would indicate a 10.05% growth year-over-year.
The Zacks Consensus Estimate for AAL’s first-quarter 2026 revenues is pegged at $13.81 billion, indicating 10.05% growth year over year. Its earnings per share loss is expected to land at 47 cents per share, compared with a 50 cents per share loss this time last year.
Will AAL beat these estimates? As can be seen below, it has a strong track record of doing just that.
Key Issues Ahead of Earnings
Analysts expect that despite consumer uncertainty given the cost of living crisis that passenger demand will have been “solid” over the period. However, its bottom line will have been dented by the Iran war and the hike in oil prices. This is because fuel is a key cost for airlines, especially with most U.S. carriers having abandoned fuel hedging strategies. AAL expects jet fuel costs of almost $2.75 per gallon for the first quarter. Higher airport and labor costs will also have bashed profits.
Analysts will also be keen to talk to AAL management about merger rumors with peer United Airlines (UAL), which it has recently played down, and what it means for wider industry consolidation.
Thomas Fitzgerald, analyst at TD Cowen recently lowered his price target on American Airlines to $15 from $17 and kept a Buy rating on the shares. He is skeptical on the resiliency of travel demand given the likelihood of a prolonged period of higher energy prices and decelerating credit card data. He sees Delta (DAL) as the most defensive and United as the most attractive over the long term.
Is AAL a Good Stock to Buy Now?
On TipRanks, AAL has a Moderate Buy consensus based on 6 Buy, 7 Hold and 1 Sell ratings. Its highest price target is $22. AAL stock’s consensus price target is $15.54, implying a 33.81% upside.
