American Airlines (AAL) AI Stock Analysis

• Market Cap: $7.38B
• Dividend Yield: N/A
• Average Volume (3M): 62.36M
• Price to Earnings (P/E): 12.9
• Beta (1Y): 1.08
• Revenue Growth: 1.92%
• EPS Growth: 36.07%
• Country: US
• Employees: 133,100
• Sector: Industrials
• Sector Strength: 93
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.59
• Shares Outstanding: 659,512,300
• 10 Day Avg. Volume: 58,911,734
• 30 Day Avg. Volume: 62,363,247
• PEG Ratio: -0.57
• Price to Book (P/B): -1.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.08
• Enterprise Value/Market Cap: 5.84
• Enterprise Value/Revenue: 0.20
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 2.52
• 1Y Price Target: $13.31
• Price Target Upside: 18.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 62 Neutral
• Price Target: $12.00 ▲( 7.24% Upside)

American Airlines' overall stock score reflects a company in recovery with strong cash flows and moderate growth prospects. However, significant financial risks from high leverage and profitability challenges, coupled with negative sentiment from recent earnings, weigh down the score. Technical indicators provide some positive outlook, but overall caution is advised due to persistent uncertainties.

Positive Factors

Financial Performance

American Airlines reported a better than expected loss per share, outperforming both the analyst's estimate and consensus.

Loyalty Programs

Loyalty programs continue to be a bright spot with significant revenue and co-brand spend increases year-over-year.

Market Position

American Airlines Group holds a dominant share of the US domestic market with an expansive route network, providing a wide range of travel options and facilitating seamless global connections.

Negative Factors

Financial Leverage

High financial leverage remains an obstacle for AAL's share price re-rating, restricting expansion opportunities and fleet modernisation.

Macroeconomic Environment

Macroeconomic weakness could curb discretionary spending on travel, as rising unemployment and higher cost of living may lead households to cut back on travel spending.

Revenue Outlook

The company's TRASM metric was cut by approximately 4 points, reflecting a less favorable revenue outlook than previously anticipated.

American Airlines Business Overview & Revenue Model

Company Description

American Airlines Group Inc. (AAL) is a major American airline headquartered in Fort Worth, Texas. It operates an extensive international and domestic network, with a significant presence in the passenger air transportation sector. American Airlines provides scheduled air transportation services for passengers and cargo, primarily serving North America, the Caribbean, South America, Europe, and Asia. The company offers a range of products and services including basic economy, main cabin, and premium seating options. Additionally, it provides loyalty programs and various travel-related services.

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 is showing signs of recovery with improving revenues and cash flows. The income statement indicates improved margins, while the cash flow statement highlights strong cash generation. However, profitability remains a challenge due to low net margins, and high leverage poses significant financial risks as reflected in the negative equity.

Income Statement

American Airlines' TTM (Trailing-Twelve-Months) gross profit margin is approximately 23.28%, with a net profit margin of 1.26%. Revenue growth from 2022 to 2023 was robust at about 7.79%, indicating recovery from the pandemic lows. However, profitability remains a challenge with relatively low net margins, although there is improvement compared to previous years.

Balance Sheet

The balance sheet reveals a negative stockholders' equity, indicative of high leverage and potential risk. The debt-to-equity ratio is not meaningful due to negative equity, but the company carries significant debt relative to its assets. The equity ratio is negative, further emphasizing financial instability and high leverage.

Cash Flow

Cash flow metrics show strength in operating cash flow and free cash flow, with TTM free cash flow growing by approximately 9.02% from the previous year. The operating cash flow to net income ratio is healthy at 6.22, indicating strong cash generation relative to net earnings.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
54.19B	54.21B	52.79B	48.97B	29.88B	17.34B
	Gross Profit
12.62B	16.69B	11.81B	9.04B	27.00M	-7.60B
	EBIT
2.34B	2.61B	3.03B	-150.00M	-5.07B	-10.42B
	EBITDA
4.20B	5.01B	5.20B	4.13B	1.59B	-7.86B
	Net Income Common Stockholders
685.00M	846.00M	822.00M	127.00M	-1.99B	-8.88B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.47B	6.98B	7.58B	9.81B	13.29B	6.86B
	Total Assets
62.61B	61.78B	63.06B	64.72B	66.47B	62.01B
	Total Debt
36.60B	37.54B	40.66B	42.01B	44.50B	39.27B
	Net Debt
35.77B	36.74B	40.09B	41.57B	44.22B	39.02B
	Total Liabilities
67.12B	65.76B	68.26B	70.52B	73.81B	68.88B
	Stockholders Equity
-4.51B	-3.98B	-5.20B	-5.80B	-7.34B	-6.87B
Cash Flow		Free Cash Flow
3.52B	1.30B	1.21B	-733.00M	496.00M	-8.50B
	Operating Cash Flow
4.26B	3.98B	3.80B	2.17B	704.00M	-6.54B
	Investing Cash Flow
-656.00M	-968.00M	-502.00M	636.00M	-5.98B	-4.34B
	Financing Cash Flow
-3.38B	-2.79B	-3.21B	-2.63B	5.29B	10.99B

American Airlines Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.19
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 11.19 is above the 20-day moving average (MA) of 11.04, above the 50-day MA of 10.59, and below the 200-day MA of 13.10, indicating a neutral trend. The MACD of 0.28 indicates Negative momentum. The RSI at 51.94 is Neutral, neither overbought nor oversold. The STOCH value of 16.53 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
DAL	79 Outperform	$31.29B	8.50	27.52%	1.15%	4.91%	-27.21%
LTM	77 Outperform	$11.44B	10.61	138.69%	1.68%	6.41%	49.58%
UAL	75 Outperform	$24.38B	6.81	33.57%	―	5.31%	35.95%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
AAL	62 Neutral	$7.38B	12.92	-21.27%	―	1.92%	36.07%
LUV	59 Neutral	$17.64B	36.75	5.63%	2.33%	3.26%	27.77%
JBLU	44 Neutral	$1.75B	―	-11.30%	―	-3.02%	66.90%

American Airlines Corporate Events

American Airlines Reports Q1 Loss Amid Challenges

On April 24, 2025, American Airlines reported a first-quarter revenue of $12.6 billion but faced a GAAP net loss of $473 million. Despite economic uncertainties and challenges such as the tragic accident of American Eagle Flight 5342, the company remains focused on strengthening its balance sheet and enhancing customer experience. The airline ended the quarter with $10.8 billion in liquidity and reduced its total debt by $1.2 billion. American Airlines is optimistic about its future, supported by a strong operational performance and strategic partnerships, including an expanded collaboration with Citi starting in 2026.

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).