IB Net Payout Yields Model

American Airlines: Compressed Valuation Due To Irrational Fears


  • American Airlines' stock is near yearly lows despite the airline returning to producing massive profits.
  • Higher fuel prices are a concern for the market, but they don't significantly impact the airline's ability to generate substantial profits.
  • The stock is far too cheap trading at only 4.5x EPS targets while industrial transport peers trade at 3x the PE multiple.
Despite the airlines returning to massive profits over the last year, American Airlines Group (NASDAQ:AAL) is back to near yearly lows. One prime reason for the weakness is higher fuel prices constantly feared by the market for no rational reason pushing the valuation far below industrial transport peers. My investment thesis remains ultra Bullish on the airline due to the cheap valuation from the irrational dip in the stock back below $14.

Read the full article on Seeking Alpha. 

Disclosure: Long AAL. Please read the disclaimer page for more details. 


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