Shares of American Airlines soared 7.4% on Monday after Transportation Security Administration (TSA) checkpoint data showed improving air travel demand. According to the data compiled by the federal agency, 831,789 travelers were screened at airports across the US on Sunday, the highest since March 17.
American Airlines (AAL) was hit hard by the complete travel halt amid the COVID-19 pandemic. Last month, the airline reported a 86.4% year-over-year plunge in 2Q revenues and recorded a pre-tax loss of $4.3 billion.
On July 27, Raymond James analyst Savanthi Syth upgraded the stock to Hold from Sell citing a more balanced risk-reward scenario for the airline. Syth stated that “Our view remains that bankruptcy is not in the cards for American in 2020 with Chapter 11 only a potential avenue if the earnings recovery stalls over multiple years.”
Overall, the Street is sidelined on the stock. The Hold analyst consensus is based on 2 Holds, 4 Sells, and 3 Buys. With shares down 51.2% this year, the average price target of $15.40 now implies upside potential of 10%. (See AAL stock analysis on TipRanks).