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American Airlines (AAL)
NASDAQ:AAL
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American Airlines
(NASDAQ:AAL)
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Rating:59Neutral
Price Target:
$12.50
▲(5.40% Upside)
American Airlines' stock score reflects a strong recovery in revenue and operational performance, tempered by high leverage and negative equity risks. Technical indicators suggest neutral momentum, while valuation is moderate. Earnings call insights reveal strong premium demand but highlight domestic revenue challenges and operational disruptions.
Positive Factors
Revenue Growth
The record revenue achievement indicates strong market demand and effective pricing strategies, which can sustain long-term growth and market position.
Cash Flow Management
Strong cash flow generation and debt reduction enhance financial flexibility, supporting future investments and resilience against economic downturns.
AAdvantage Program Growth
Growth in the AAdvantage program boosts customer loyalty and ancillary revenue, providing a competitive edge and stable revenue stream.
Negative Factors
High Leverage
High leverage and negative equity can limit financial flexibility and increase risk, potentially impacting long-term financial stability.
Domestic Revenue Weakness
Weak domestic revenue growth may hinder overall profitability and market share, especially if international demand fluctuates.
Operational Challenges
Operational disruptions can affect service reliability and customer satisfaction, potentially impacting brand reputation and future demand.
American Airlines (AAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.85B
Dividend YieldN/A
Average Volume (3M)83.28M
Price to Earnings (P/E)15.2
Beta (1Y)1.08
Revenue Growth1.50%
EPS GrowthN/A
CountryUS
Employees133,100
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.95
Shares Outstanding659,828,800
10 Day Avg. Volume69,446,266
30 Day Avg. Volume83,280,411
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap4.49
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit2.53
Enterprise Value/Ebitda11.38
Forecast
1Y Price Target
$14.58Price Target Upside22.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
American Airlines Business Overview & Revenue Model
Company DescriptionAmerican 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 MoneyAmerican Airlines generates revenue primarily through ticket sales for passenger travel, which contributes a significant portion of its earnings. The airline also earns money from cargo services, which involve transporting goods and freight. Additional revenue streams include ancillary fees for services such as checked baggage, seat selection, and in-flight purchases. The company benefits from its loyalty program, AAdvantage, which drives repeat business and partnerships with hotels, car rental companies, and other travel-related services. Moreover, American Airlines engages in co-branded credit card partnerships, further enhancing its revenue through transaction fees and customer spending. The airline's financial performance is also influenced by factors such as fuel prices, operational efficiency, and demand fluctuations in the travel industry.
American Airlines Key Performance Indicators (KPIs)
Any
Passenger Miles
Measures the total distance flown by paying passengers, indicating overall demand and revenue potential from passenger services.
Measures the total distance flown by paying passengers, indicating overall demand and revenue potential from passenger services.
Data provided by:
Main Street Data
Main Street DataAmerican Airlines Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance in a challenging environment, with record revenue and significant progress in premium demand and indirect revenue recovery. However, there were notable challenges, including weakness in domestic revenue and operational disruptions, alongside a projected loss for the third quarter.Q2-2025 Updates
Positive Updates
Record Revenue Achievement
American Airlines reported record revenue of $14.4 billion for the second quarter, showcasing progress in delivering on revenue potential despite a challenging environment.
Premium Demand Resilience
Premium demand and spending from higher-income consumers remained strong, with unit revenue in the premium cabin performing 4 points better than the main cabin.
Improved Indirect Revenue Recovery
Efforts to recover revenue from indirect channels exceeded expectations, with a 3% reduction in indirect share compared to historical levels.
AAdvantage Program Growth
Active AAdvantage members grew by 7% year-to-date, contributing significantly to premium revenue with spending on co-branded credit cards up 6% year-over-year.
Cash Flow and Debt Management
The company generated $791 million in free cash flow for the quarter and reduced net debt to $29 billion, the lowest level since 2015.
Negative Updates
Domestic Revenue Weakness
Domestic unit revenue was down approximately 6% year-over-year due to persistent softness in the main cabin.
Third Quarter Loss Projection
The company anticipates a third quarter loss per share between $0.10 and $0.60, with a full-year earnings outlook ranging from a loss of $0.20 to a profit of $0.80 per share.
Operational Challenges
Significant storm activity at major hubs and increased disruptive operational events led to a challenging operating environment.
Company Guidance
During American Airlines' second quarter 2025 earnings call, CEO Robert Isom reported an adjusted pretax profit of $869 million, equating to earnings per share of $0.95, which reached the higher end of their guidance from April. The airline achieved record revenue of $14.4 billion and a second quarter operating margin of approximately 8%. Despite a challenging domestic market with a 6% year-over-year decrease in domestic unit revenue, international and premium cabins displayed strength, with Atlantic PRASM increasing by 5% and Pacific PRASM by 1% year-over-year. The airline's AAdvantage program saw a 7% increase in active members year-to-date, contributing to a 6% year-over-year increase in spending on co-branded credit cards. American Airlines ended the quarter with $38 billion in total debt and $29 billion in net debt, marking their lowest net debt levels since 2015. Looking forward, the airline anticipates third-quarter revenue to range between down 2% and up 1% year-over-year, with capacity expected to increase by 2% to 3%. They forecast a third-quarter loss per share between $0.10 and $0.60, and for the full year, a range from a loss of $0.20 to a profit of $0.80 per share.American Airlines Financial Statement Overview
Summary
American Airlines shows a strong recovery in revenue and operational performance with positive cash flow. However, high leverage and negative equity pose significant financial stability risks.Income Statement
American Airlines exhibits a strong recovery with a positive revenue growth trend from 2020 to 2025. The TTM data shows a Gross Profit Margin of 25.67% and a Net Profit Margin of 1.04%, indicating steady profitability but room for improvement in net income. EBIT and EBITDA margins are positive, demonstrating operational efficiency gains over time.65
Positive
Balance Sheet
The balance sheet reveals high leverage with a negative stockholders' equity, translating to a problematic Debt-to-Equity Ratio. Despite an improvement in total assets, the negative equity poses significant risks. The company's Equity Ratio is negative, compromising financial stability.40
Negative
Cash Flow
Cash flow analysis shows an improvement in operating cash flow, with a strong Free Cash Flow of $4.01 billion in TTM. The Operating Cash Flow to Net Income Ratio indicates robust cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio suggests potential volatility in free cash flow.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 54.25B | 54.21B | 52.79B | 48.97B | 29.88B | 17.34B |
| Gross Profit | 13.92B | 16.69B | 11.81B | 9.04B | 27.00M | -7.60B |
| EBITDA | 3.10B | 5.01B | 5.20B | 4.13B | 1.59B | -7.86B |
| Net Income | 567.00M | 846.00M | 822.00M | 127.00M | -1.99B | -8.88B |
Balance Sheet | ||||||
| Total Assets | 63.67B | 61.78B | 63.06B | 64.72B | 66.47B | 62.01B |
| Cash, Cash Equivalents and Short-Term Investments | 8.57B | 6.98B | 7.58B | 8.96B | 12.43B | 6.86B |
| Total Debt | 37.20B | 37.54B | 40.66B | 43.69B | 46.18B | 41.02B |
| Total Liabilities | 67.54B | 65.76B | 68.26B | 70.52B | 73.81B | 68.88B |
| Stockholders Equity | -3.87B | -3.98B | -5.20B | -5.80B | -7.34B | -6.87B |
Cash Flow | ||||||
| Free Cash Flow | 4.00B | 1.30B | 1.21B | -733.00M | 496.00M | -8.50B |
| Operating Cash Flow | 4.09B | 3.98B | 3.80B | 2.17B | 704.00M | -6.54B |
| Investing Cash Flow | -1.55B | -968.00M | -502.00M | 636.00M | -5.98B | -4.34B |
| Financing Cash Flow | -2.35B | -2.79B | -3.21B | -2.63B | 5.29B | 10.99B |
American Airlines Technical Analysis
Negative
11.86
Price Trends
12.42
Negative
11.98
Negative
12.63
Negative
Market Momentum
-0.10
Negative
47.75
Neutral
59.25
Neutral
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 11.86 is above the 20-day moving average (MA) of 11.73, below the 50-day MA of 12.42, and below the 200-day MA of 12.63, indicating a neutral trend. The MACD of -0.10 indicates Negative momentum. The RSI at 47.75 is Neutral, neither overbought nor oversold. The STOCH value of 59.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AAL.
American Airlines Risk Analysis
American Airlines disclosed 41 risk factors in its most recent earnings report. American Airlines reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Airlines Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $39.44B | 8.51 | 28.52% | 1.13% | 4.33% | -1.58% | |
76 Outperform | $32.10B | 9.93 | 25.59% | ― | 4.24% | 20.29% | |
75 Outperform | $30.97B | 14.66 | 27.12% | 1.61% | 10.61% | 37.32% | |
68 Neutral | $17.48B | 50.06 | 4.30% | 2.15% | 1.64% | 284.24% | |
65 Neutral | $12.78B | 11.40 | 161.29% | 2.26% | 5.64% | 63.23% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $7.85B | 15.25 | -21.27% | ― | 1.50% | ― |
* Industrials Sector Average
AAL
American Airlines
11.86
-1.11
-8.56%
DAL
Delta Air Lines
59.64
5.19
9.53%
RYAAY
Ryanair Holdings
61.98
17.76
40.16%
LUV
Southwest Airlines
33.52
3.76
12.63%
UAL
United Airlines Holdings
99.14
25.14
33.97%
LTM
LATAM Airlines Group SA Sponsored ADR
44.58
17.96
67.47%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.