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American Airlines: Left Far Behind

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Update - Jan. 6, 2025

American Airlines gets a couple of big upgrades including TD Cowen with a $25 PT. As usually, the analysts waited until the stock was at multi-year highs. 

-Shares of American Airlines (NASDAQ:AAL) are getting a lift early Monday as TD Cowen and Jefferies both upgraded the stock to Buy from Hold with Cowen raising its target price to a street high of $25.

-American’s (AAL) strategy to focus on its short-haul network that is “ideally” served by its regional fleet offers connectivity to its carrier’s Sun Belt hubs and benefits its international network, a stark difference from other carriers that focus on their large, coastal hubs, Jefferies analyst Conor Walters writes in Monday’s research note.

-“Ongoing corporate share recapture, lower capacity and [capital expenditures] and a new [credit card deal with Citigroup] means American (AAL) could see significant surprise to the upside in 2025 against a rationalizing industry backdrop,” Walters adds.

Finviz Chart

Original article posted on Dec. 5

  • American Airlines provided bullish guidance, boosting Q4'24 EPS to $0.65, above consensus estimates of $0.39.
  • The airline has an exclusive loyalty deal with Citi aiming for 10% annual growth, potentially adding ~$2 to EPS by 2030.
  • The stock only trades at 5x to 6x normalized EPS and still trades far below pre-Covid levels, unlike other legacy airlines.
Some airline stocks have flown higher this year, but American Airlines Group, Inc. (NASDAQ:AAL) was generally left behind. The legacy airline just provided some extremely bullish guidance on the long-term profit picture due to a new loyalty agreement. My investment thesis is ultra-Bullish on the stock with only minimal gains so far in 2024 compared to legacy airline peers.

Read the full article on Seeking Alpha. 

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

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