Airline stock American Airlines (NASDAQ:AAL) has some very ambitious new plans ahead. It’s looking to augment its fleet and make its accommodations more inviting. But the plans aren’t being received well by investors, who sent American shares on a 4% nosedive in Monday morning’s trading.
AAL wants to bring in 260 new narrow-body planes, including a slate of Boeing (NYSE:BA) Max 10s. Given that the Max 10 has yet to be certified by the Federal Aviation Administration (FAA), that part of the plan may be subject to change. It’s also got plans to start refitting some of its older models in a bid to expand its first class section. Reports note that rising demand for first-class seats, as well as increased use of rewards points, are reasons for this move.
More Troubles Afoot
This sounds like good news, but it’s not shaping up that way all over. AAL is facing a flight attendant strike in New York City as the workers continue to seek collective bargaining agreements. In addition, the strike will overlap with American’s Investor Day events, which may taint at least some of what American has to say.
Further, it seems like AAL’s management is actively putting “the customer last.” A report from View From the Wing noted that, among other things, American recently revamped its policy to forbid customers from getting on earlier flights, even if they’re “lifetime Platinum two-million mile members.”
Is American Airlines Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAL stock based on nine Buys, three Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 6.39% loss in its share price over the past year, the average AAL price target of $17.86 per share implies 18.67% upside potential.
