American Airlines (AAL) AI Stock Analysis

• Market Cap: $6.25B
• Dividend Yield: N/A
• Average Volume (3M): 70.62M
• Price to Earnings (P/E): 8.7
• Beta (1Y): 1.03
• Revenue Growth: 2.70%
• EPS Growth: 2.20%
• Country: US
• Employees: 133,300
• Sector: Industrials
• Sector Strength: 70
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 1.11
• Shares Outstanding: 657,575,560
• 10 Day Avg. Volume: 82,633,588
• 30 Day Avg. Volume: 70,617,284
• PEG Ratio: 3.96
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.14
• Price to Cash Flow (P/CF): 4.70
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.79
• Price Target Upside: 63.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

American Airlines' score is driven by its financial recovery and undervaluation potential, offset by technical weakness and high debt. The cautious outlook, despite positive earnings achievements, further tempers the score.

Positive Factors

Corporate Revenue

Corporate sales are progressing well, with managed corporate revenue rising and a possibility of recapturing lost share ahead of year-end 2025.

Financial Guidance

Management has raised FY24 guidance due to improving supply-demand dynamics in the US domestic market.

Negative Factors

Adjusted Loss

Management now expects a wider adjusted loss per share amid heightened macro uncertainty and weaker sentiment weighing on US domestic travel demand.

Financial Leverage

High financial leverage remains an obstacle for American Airlines' share price re-rating, restricting its expansion opportunities and fleet modernization.

Revenue Expectations

American Airlines Group Inc. lowered its Q1 revenue expectations to flat due to a weaker revenue environment and moderating domestic leisure demand.

American Airlines Business Overview & Revenue Model

Company Description

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Madrid, Seattle/Tacoma, Sydney, and Tokyo. As of December 31, 2021, it operated a mainline fleet of 865 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1930 and is headquartered in Fort Worth, Texas.

How the Company Makes Money

American Airlines primarily generates revenue through the sale of passenger tickets, which accounts for the majority of its income. This includes different classes of seating such as economy, business, and first-class, each with varying price points. The company also earns revenue from ancillary services such as checked baggage fees, seat selection fees, and in-flight sales, including food and beverage purchases. Cargo transportation services contribute to its revenue streams as well. Moreover, American Airlines benefits from its AAdvantage loyalty program, which not only enhances customer retention but also generates additional income through partnerships with credit card companies and other travel-related businesses. Strategic alliances and joint ventures with other airlines also play a role in expanding its network and optimizing earnings.

American Airlines Financial Statement Overview

Summary

American Airlines shows signs of recovery with improving revenue and cash flow. However, the high debt levels and negative equity present significant financial challenges that require strategic management.

Income Statement

American Airlines has demonstrated recovering revenue growth, with a 2.7% increase from 2023 to 2024. However, the gross profit margin of 30.8% and net profit margin of 1.56% in 2024 indicate moderate profitability, with room for improvement. The EBIT margin stands at 4.82% and EBITDA margin at 2.11%, showing challenges in operational efficiency despite improvements from negative margins in previous years.

Balance Sheet

The balance sheet reveals a concerning negative stockholders' equity, indicating financial instability. The debt-to-equity ratio cannot be calculated due to negative equity, highlighting the company's heavy reliance on debt financing. The equity ratio is negative, further emphasizing the need for improved financial health and reduced liabilities.

Cash Flow

Cash flow analysis shows positive developments in free cash flow, with significant growth from 2023 to 2024. The operating cash flow to net income ratio of 4.71 suggests a strong conversion of income into cash. However, the free cash flow to net income ratio at 4.71 indicates that while cash flow generation is robust, sustainability may be challenged by existing debt obligations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
54.21B	52.79B	48.97B	29.88B	17.34B
	Gross Profit
16.69B	11.81B	9.04B	27.00M	-7.60B
	EBIT
2.61B	3.03B	-150.00M	-5.07B	-10.42B
	EBITDA
5.33B	5.20B	4.13B	1.59B	-7.86B
	Net Income Common Stockholders
846.00M	822.00M	127.00M	-1.99B	-8.88B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.98B	7.58B	9.81B	13.29B	6.86B
	Total Assets
61.78B	63.06B	64.72B	66.47B	62.01B
	Total Debt
37.54B	40.66B	42.01B	44.50B	39.27B
	Net Debt
36.74B	40.09B	41.57B	44.22B	39.02B
	Total Liabilities
65.76B	68.26B	70.52B	73.81B	68.88B
	Stockholders Equity
-3.98B	-5.20B	-5.80B	-7.34B	-6.87B
Cash Flow		Free Cash Flow
3.98B	1.21B	-733.00M	496.00M	-8.50B
	Operating Cash Flow
3.98B	3.80B	2.17B	704.00M	-6.54B
	Investing Cash Flow
-968.00M	-502.00M	636.00M	-5.98B	-4.34B
	Financing Cash Flow
-2.79B	-3.21B	-2.63B	5.29B	10.99B

American Airlines Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.67
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAL, the sentiment is Negative. The current price of 9.67 is below the 20-day moving average (MA) of 10.63, below the 50-day MA of 13.14, and below the 200-day MA of 13.12, indicating a bearish trend. The MACD of -1.03 indicates Negative momentum. The RSI at 26.51 is Positive, neither overbought nor oversold. The STOCH value of 15.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AAL.

American Airlines Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTM	77 Outperform	$8.68B	9.02	166.51%	0.91%	10.24%	68.75%
UAL	77 Outperform	$20.54B	6.96	28.63%	―	6.23%	20.08%
DAL	71 Outperform	$25.70B	6.98	27.52%	1.34%	4.91%	-27.21%
LUV	64 Neutral	$14.80B	34.19	4.50%	2.79%	5.34%	-6.20%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%
AAL	52 Neutral	$6.25B	8.73	-21.27%	―	2.70%	2.20%
JBLU	42 Neutral	$1.31B	―	-26.60%	―	-3.50%	-148.99%

American Airlines Corporate Events

American Airlines Updates Loan Agreement and Debt Settlement

On March 24, 2025, American Airlines and AAdvantage Loyalty IP Ltd. amended their Term Loan Credit and Guaranty Agreement, replacing $2.275 billion in term loans with new loans of the same amount but with revised interest rates and reduced principal amortization. Additionally, American Airlines announced it will settle its 6.50% Convertible Senior Notes due 2025 entirely in cash, updating its forecast for shares outstanding for calculating earnings per share for 2025.

American Airlines Updates Q1 2025 Financial Outlook

On March 11, 2025, American Airlines presented its financial and operational outlook at the J.P. Morgan Industrials Conference, updating its guidance for the first quarter of 2025. The company reported a weaker-than-expected revenue environment due to the impact of Flight 5342 and a decline in the domestic leisure segment, leading to an expected flat total revenue compared to Q1 2024 and an adjusted loss per diluted share of approximately ($0.60) to ($0.80).

American Airlines Reports Record Revenue and Debt Reduction

On January 23, 2025, American Airlines reported its financial results for the fourth quarter and full year 2024, showcasing record revenues and a significant reduction in total debt. The company achieved a record fourth-quarter revenue of $13.7 billion and a full-year revenue of $54.2 billion, alongside a successful reduction of its total debt by $15 billion, a year ahead of schedule. American Airlines also announced a new 10-year co-branded credit card partnership with Citi, expected to enhance value for cardmembers and expand the loyalty ecosystem. The airline maintained strong operational performance despite challenges, achieving its second-best annual completion factor since the merger with US Airways.