Analysts cite a more balanced risk/reward profile and less favorable competitive trends versus peers as reasons for their caution on American Airlines, resulting in only a modest price target increase from $13.43 to $13.58.
Analyst Commentary
- Valuation concerns as the stock has approached its prior $14 price target.
- Risk/reward profile now viewed as more balanced, reducing upside potential.
- Competitive trends for American Airlines seen as less favorable compared to peers like Alaska Air.
- Downgrade reflects caution in the near-term outlook for share price appreciation.
- No new price target provided, indicating limited conviction in significant further gains.
What's in the News
- American Airlines and STARLUX Airlines launched an interline partnership, enabling single-ticket booking and seamless connections between American’s North American network and STARLUX’s new transpacific route connecting Phoenix and Taipei, streamlining travel for passengers across a combined network of major U.S. cities and Asia (Key Developments).
- The company is expanding its services in Quebec City, introducing a new direct flight to Dallas-Fort Worth starting August 9, 2025, increasing Charlotte service, and maintaining daily summer frequencies to Philadelphia and Chicago, supporting U.S.-bound tourism and developing key markets (Key Developments).
- American Airlines provided cautious Q3 2025 and full-year earnings guidance, forecasting Q3 revenue between down 2% and up 1% year-over-year, a potential quarterly loss per share from $0.10 to $0.60, and full-year EPS guidance ranging from a $0.20 loss to a $0.80 profit, depending on sustained demand improvement (Key Developments).
- The company announced plans to expand domestic capacity 2–3% year-over-year in Q3 2025, with July seeing peak growth (5%), while August growth slows and September declines; American expects to take delivery of 50 new aircraft in 2025, at the high end of prior guidance (Key Developments).
- American Airlines experienced flight delays due to a technology issue, as confirmed in an emailed statement to Bloomberg (Bloomberg).
Valuation Changes
Summary of Valuation Changes for American Airlines Group
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $13.43 to $13.58.
- The Net Profit Margin for American Airlines Group remained effectively unchanged, moving only marginally from 2.88% to 2.91%.
- The Consensus Revenue Growth forecasts for American Airlines Group remained effectively unchanged, at 4.5% per annum.
Disclaimer
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