American Airlines Stock Sinks After Earnings. Here's Why
American Airlines stock is lower Thursday as the air carrier's weak outlook offsets its fourth-quarter earnings and revenue beats. Here, we look at the numbers.
American Airlines (AAL) stock is selling off Thursday as the air carrier's weak outlooks for the first quarter and full year offset its top- and bottom-line fourth-quarter beats.
In the three months ending December 31, American Airlines' revenue increased 4.6% year over year to $13.7 billion. Its earnings per share (EPS) nearly tripled from the year-ago period to 86 cents.
"The American Airlines team achieved a number of important objectives in 2024," said CEO Robert Isom in a statement. "We continue to run a reliable operation, and we are reengineering the business to build an even more efficient airline. That, coupled with our commercial actions, resulted in strong financial performance in the fourth quarter."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
American Airlines' results beat analysts' expectations. Specifically, Wall Street was anticipating revenue of $13.4 billion and earnings of 64 cents per share, according to CNBC.
However, the positive sentiment around the earnings beat faded when AAL provided its outlook. Here's what the company expects to achieve:
| Metric | Q1 2025 | FY 2025 |
| Revenue growth | 3% to 5% | 4.5% to 7.5% |
| Earnings (loss) per share | ($0.20) to ($0.40) | $1.70 to $2.70 |
Analysts were anticipating a loss of just 4 cents per share in the first quarter and earnings of $2.42 per share for the full fiscal year, according to MarketWatch.
Is American Airlines stock a buy, sell or hold?
Heading into Thursday's session, American Airlines was up 37% year over year, outpacing the S&P 500's 27% total return (price change plus dividends). And analysts are generally bullish on the industrial stock.
According to S&P Global Market Intelligence, the average analyst target price for AAL stock is $20.24, representing an upside of nearly 15% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Jefferies is one of those with a Buy rating on the large-cap stock, along with a $20 price target.
"AAL's strategy concentrates on its short-haul network, comprising 75% of available seat miles (ASMs), with focus on the medium and small markets that can be ideally served by its regional fleet and its pilot scope clause," wrote Jefferies analyst Sheila Kahyaoglu in a January 6 note.
The analyst notes that these markets "offer connectivity to AAL's domestic Sun Belt hubs and enable the international network," which contrasts to America Airlines' network peer strategies that focus on large, coastal hubs.
Kahyaoglu adds that "ongoing corporate share recapture, lower capacity and capital expenditures, and a new credit card deal mean AAL could see significant surprise to the upside in 2025."
Related Content
-
Nasdaq Sinks 418 Points as Tech Chills: Stock Market TodayInvestors, traders and speculators are growing cooler to the AI revolution as winter approaches.
-
23 Last-Minute Gifts That Still Arrive Before ChristmasScrambling to cross those last few names off your list? Here are 23 last-minute gifts that you can still get in time for Christmas.
-
The Rule of Compounding: Why Time Is an Investor's Best FriendDescribed as both a "miracle" and a "wonder," compound interest is simply a function of time.
-
Nasdaq Sinks 418 Points as Tech Chills: Stock Market Today
Investors, traders and speculators are growing cooler to the AI revolution as winter approaches.
-
The Rule of Compounding: Why Time Is an Investor's Best Friend
Described as both a "miracle" and a "wonder," compound interest is simply a function of time.
-
If You're a U.S. Retiree Living in Portugal, Your Tax Plan Needs a Post-NHR Strategy ASAPWhen your 10-year Non-Habitual Resident tax break ends, you could see your tax rate soar. Take steps to plan for this change well before the NHR window closes.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
The Delayed November Jobs Report Is Out. Here's What It Means for the Fed and Rate CutsThe November jobs report came in higher than expected, although it still shows plenty of signs of weakness in the labor market.
-
Your Year-End Tax and Estate Planning Review Just Got UrgentChanging tax rules and falling interest rates mean financial planning is more important than ever as 2025 ends. There's still time to make these five key moves.
-
What Makes This Business So Successful? We Find Out From the Founder's KidsThe children of Morgan Clayton share how their father's wisdom, life experience and caring nature have turned their family business into a respected powerhouse.
-
Stocks Struggle Ahead of November Jobs Report: Stock Market TodayOracle and Broadcom continued to fall, while market participants looked ahead to Tuesday's jobs report.
