American Airlines (AAL) AI Stock Analysis

• Market Cap: $8.68B
• Dividend Yield: N/A
• Average Volume (3M): 48.67M
• Price to Earnings (P/E): 80.2
• Beta (1Y): 1.07
• Revenue Growth: 1.27%
• EPS Growth: 118.64%
• Country: US
• Employees: 133,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.16
• Shares Outstanding: 660,304,570
• 10 Day Avg. Volume: 47,901,894
• 30 Day Avg. Volume: 48,665,221
• PEG Ratio: -1.05
• Price to Book (P/B): -2.72
• Price to Sales (P/S): 0.19
• P/FCF Ratio: -14.89
• Enterprise Value/Market Cap: 4.96
• Enterprise Value/Revenue: 0.79
• Enterprise Value/Gross Profit: 2.77
• Enterprise Value/Ebitda: 11.10
• 1Y Price Target: $17.73
• Price Target Upside: 33.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 2.09
• Revenue Forecast (FY): $59.41B

• Rating: 47 Neutral
• Price Target: $15.00 ▲(12.61% Upside)
• Action: Downgraded Date: 01/29/26
• Date: Action: Downgraded 01/29/26

The score is held back primarily by weak financial quality (high leverage/negative equity) and very thin, volatile profitability with 2025 near breakeven and negative free cash flow. Technicals also remain bearish (below key moving averages with negative MACD). Offsetting these, management’s 2026 outlook is constructive (expected >$2B free cash flow, cost savings, and continued debt reduction), but valuation looks stretched with a very high P/E and no dividend support.

Positive Factors

Stable revenue base

A durable, large revenue base around $49B–$55B demonstrates structural demand and network scale across domestic and international markets. That recurring top-line supports route density, bargaining power with suppliers, and underpins multi-year recovery of unit economics even if margins remain variable.

Loyalty & cobranded card growth

Growth in AAdvantage enrollments and a long-term Citi co‑brand card deepen customer engagement and high-margin revenue streams. Structural loyalty expansion increases repeat bookings, drives ancillary spend and yields more stable, predictable cash flows via card-driven spending and loyalty monetization over years.

Fleet & premium product expansion

Planned fleet modernization and substantial premium-seat growth shift capacity toward higher-yield international and premium travel. This structural product upgrade should lift long-term unit revenues and margins as premium mix increases, supporting sustained revenue per ASM improvements across cycles.

Negative Factors

Weak balance sheet

High absolute debt and negative equity constrain financial flexibility, raising refinancing and interest-rate sensitivity. This fragile capital base limits ability to absorb shocks, fund capex without refinancing, and risks forced deleveraging actions if revenue or cash generation weakens over the coming months.

Thin, volatile profitability

Margins have swung from low-single-digit positives to near breakeven, indicating earnings fragility. Persistent volatility weakens the company's ability to build retained earnings, fund strategic investments from operating profits, and increases dependence on external financing during downturns.

Free cash flow volatility

Inconsistent free cash flow, including a 2025 cash outflow, constrains debt paydown and reinvestment capacity. Volatile FCF increases reliance on liquidity reserves or capital markets for fleet and premium investments, complicating management's multi-year plan to reduce debt and sustain capital spending.

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 generates revenue primarily through the sale of passenger tickets, which constitutes the largest portion of its income. The airline operates various fare classes and provides additional services such as seat upgrades and priority boarding for increased revenue. Cargo services also contribute significantly to its earnings, offering freight transportation for businesses. Furthermore, American Airlines benefits from ancillary revenue streams, including baggage fees, in-flight sales, and loyalty programs like AAdvantage, which encourages customer loyalty and repeat business. Partnerships with hotels, car rental companies, and credit card firms enhance its revenue through co-branded offers and rewards programs. The airline's financial performance is also influenced by operational efficiency, fleet management, and fuel management strategies.

American Airlines Financial Statement Overview

Summary

Revenue has stabilized at a strong ~$49B–$55B post-recovery, but profitability is thin and volatile with 2025 near breakeven. Cash generation is positive in operating terms but free cash flow flipped negative in 2025, and the balance sheet remains the biggest constraint with very high debt and persistently negative equity.

Income Statement

Revenue has largely recovered and stabilized around ~$49B–$55B since 2022, with strong rebounds in 2021–2022 growth and modest growth in 2023–2024. Profitability, however, is inconsistent: net margin improved from deep losses in 2020 to low-single-digit positives in 2022–2024, but 2025 fell sharply to near breakeven (net income ~$0.1B; net margin ~0.2%) as operating profitability also compressed (EBIT and EBITDA margins down versus 2023–2024). Overall: solid demand/revenue base, but thin and volatile earnings power.

Balance Sheet

Leverage remains heavy with total debt staying very high (~$37.5B–$46.2B across 2020–2025) and equity persistently negative (about -$3.7B to -$7.3B), which limits financial flexibility. Assets are relatively stable (~$61B–$66B), but the negative equity structure makes the capital base fragile and increases sensitivity to downturns, higher fuel costs, or weaker pricing. While debt has come down from peaks, the balance sheet is still the weakest part of the profile.

Cash Flow

Cash generation has improved markedly from 2020 (negative operating cash flow) to positive operating cash flow in 2021–2025, indicating recovery in core cash earnings. However, free cash flow is volatile: positive in 2021 and again in 2023–2024, but negative in 2022 and 2025 (2025 free cash flow about -$0.7B). In 2025, operating cash flow also declined versus 2024, and cash conversion looks pressured given the sharp drop in net income alongside weaker free cash flow. Overall: capable of producing cash in normal periods, but consistency is a concern.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	54.63B	54.21B	52.79B	48.97B	29.88B
Gross Profit	15.53B	11.50B	11.82B	9.04B	-422.00M
EBITDA	3.88B	5.01B	5.20B	4.13B	1.59B
Net Income	111.00M	846.00M	822.00M	127.00M	-1.99B
Balance Sheet
Total Assets	61.77B	61.78B	63.06B	64.72B	66.47B
Cash, Cash Equivalents and Short-Term Investments	6.57B	6.98B	7.58B	8.96B	12.43B
Total Debt	35.97B	37.54B	40.66B	43.69B	46.18B
Total Liabilities	65.50B	65.76B	68.26B	70.52B	73.81B
Stockholders Equity	-3.73B	-3.98B	-5.20B	-5.80B	-7.34B
Cash Flow
Free Cash Flow	-680.00M	1.30B	1.21B	-733.00M	496.00M
Operating Cash Flow	3.10B	3.98B	3.80B	2.17B	704.00M
Investing Cash Flow	-1.89B	-968.00M	-502.00M	636.00M	-5.98B
Financing Cash Flow	-1.05B	-2.79B	-3.21B	-2.63B	5.29B

American Airlines Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 13.32 is below the 20-day moving average (MA) of 13.95, below the 50-day MA of 14.82, and above the 200-day MA of 12.94, indicating a neutral trend. The MACD of -0.38 indicates Positive momentum. The RSI at 41.67 is Neutral, neither overbought nor oversold. The STOCH value of 14.05 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	$15.87B	11.71	140.98%	3.50%	6.81%	58.22%
RYAAY	73 Outperform	$33.51B	13.23	28.00%	1.37%	14.75%	71.73%
UAL	71 Outperform	$36.42B	11.03	23.99%	―	4.24%	20.29%
DAL	70 Outperform	$45.22B	9.05	27.70%	0.96%	4.33%	-1.58%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
LUV	61 Neutral	$24.88B	63.93	4.82%	1.73%	0.65%	―
AAL	47 Neutral	$8.68B	80.19	―	―	1.27%	118.64%

American Airlines Corporate Events

American Airlines Posts Record 2025 Revenue Amid Operational Disruptions

On Jan. 27, 2026, American Airlines reported record fourth-quarter 2025 revenue of $14.0 billion and record full-year 2025 revenue of $54.6 billion, despite an estimated $325 million revenue hit from a government shutdown, posting GAAP net income of $99 million for the quarter and $111 million for the year, and non-GAAP net income of $106 million and $237 million, respectively. The carrier highlighted strong momentum in premium cabins and corporate channels, improving domestic and international unit revenue trends, and continued debt reduction of $2.1 billion in 2025, ending the year with $36.5 billion in total debt, $30.7 billion in net debt, and $9.2 billion in available liquidity. Operationally, the airline pointed to investments in an elevated customer experience, including its Flagship Suite, expanded premium lounges, free high-speed Wi‑Fi for AAdvantage members, app-based self-service tools, and a re-banked Dallas Fort Worth hub to improve on-time performance, while also acknowledging the disruptive impact of Winter Storm Fern in early 2026, which has driven thousands of cancellations and a meaningful but quantified hit to first-quarter capacity, revenue and unit costs. The company emphasized ongoing initiatives across network optimization, fleet modernization, loyalty and credit card partnerships, and commercial and distribution enhancements as key drivers of its multiyear plan to improve financial performance and strengthen its competitive position.

The most recent analyst rating on (AAL) stock is a Hold with a $15.50 price target. To see the full list of analyst forecasts on American Airlines stock, see the AAL Stock Forecast page.