NasdaqGS:AAL

Stock Analysis Report

Executive Summary

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier.


Snowflake Analysis

Undervalued second-rate dividend payer.


Similar Companies

Share Price & News

How has American Airlines Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AAL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-31.7%

AAL

-20.5%

US Airlines

-11.2%

US Market


1 Year Return

-45.2%

AAL

-15.7%

US Airlines

4.1%

US Market

Return vs Industry: AAL underperformed the US Airlines industry which returned -15.7% over the past year.

Return vs Market: AAL underperformed the US Market which returned 4.1% over the past year.


Shareholder returns

AALIndustryMarket
7 Day-31.7%-20.5%-11.2%
30 Day-31.5%-20.0%-9.5%
90 Day-33.9%-23.4%-5.4%
1 Year-44.4%-45.2%-14.4%-15.7%6.2%4.1%
3 Year-58.1%-59.4%-17.6%-21.0%30.3%21.9%
5 Year-58.3%-60.4%2.0%-4.0%55.0%38.0%

Price Volatility Vs. Market

How volatile is American Airlines Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is American Airlines Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AAL ($18.99) is trading below our estimate of fair value ($66.23)

Significantly Below Fair Value: AAL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AAL is good value based on its PE Ratio (5x) compared to the Airlines industry average (6.6x).

PE vs Market: AAL is good value based on its PE Ratio (5x) compared to the US market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: AAL is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: AAL has negative assets, so we can't compare its PB Ratio to the US Airlines industry average.


Next Steps

Future Growth

How is American Airlines Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

11.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AAL's forecast earnings growth (11.3% per year) is above the savings rate (1.7%).

Earnings vs Market: AAL's earnings (11.3% per year) are forecast to grow slower than the US market (12.9% per year).

High Growth Earnings: AAL's earnings are forecast to grow, but not significantly.

Revenue vs Market: AAL's revenue (3.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: AAL's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AAL's Return on Equity is forecast to be very high in 3 years time (40.2%).


Next Steps

Past Performance

How has American Airlines Group performed over the past 5 years?

-31.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AAL has a large one-off loss of $652.0M impacting its December 31 2019 financial results.

Growing Profit Margin: AAL's current net profit margins (3.7%) are higher than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: AAL's earnings have declined by -31.8% per year over the past 5 years.

Accelerating Growth: AAL's earnings growth over the past year (19.4%) exceeds its 5-year average (-31.8% per year).

Earnings vs Industry: AAL earnings growth over the past year (19.4%) underperformed the Airlines industry 41.8%.


Return on Equity

High ROE: AAL's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is American Airlines Group's financial position?


Financial Position Analysis

Short Term Liabilities: AAL has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: AAL has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: AAL has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: AAL's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: AAL's debt is not well covered by operating cash flow (16.1%).

Interest Coverage: AAL's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet

Inventory Level: AAL has a high level of physical assets or inventory.

Debt Coverage by Assets: AAL has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is American Airlines Group's current dividend yield, its reliability and sustainability?

2.11%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.6%markettop25%4.1%industryaverage2.7%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: AAL's dividend (2.11%) is higher than the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: AAL's dividend (2.11%) is low compared to the top 25% of dividend payers in the US market (4.13%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, AAL has been paying a dividend for less than 10 years.

Growing Dividend: AAL has only been paying a dividend for 6 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (10.5%), AAL's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AAL's dividends in 3 years are forecast to be thoroughly covered by earnings (6.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.2yrs

Average management tenure


CEO

Doug Parker (57yo)

6.2yrs

Tenure

US$11,999,517

Compensation

Mr. William Douglas Parker, also known as Doug, has been the Chief Executive Officer and Chairman of American Airlines, Inc. (US) since 2013. Mr. Parker has been Chief Executive Officer of American Airline ...


CEO Compensation Analysis

Compensation vs Market: Doug's total compensation ($USD12.00M) is above average for companies of similar size in the US market ($USD6.67M).

Compensation vs Earnings: Doug's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William Parker
Chairman & CEO6.2yrsUS$12.00m0.59% $52.0m
Robert Isom
President3.5yrsUS$6.69m0.22% $19.3m
Derek Kerr
Executive VP & CFO6.2yrsUS$3.85m0.14% $12.5m
Maya Leibman
Executive VP & Chief Information Officer8.1yrsUS$3.86m0.081% $7.1m
Stephen Johnson
Executive Vice President of Corporate Affairs6.2yrsUS$3.90m0.17% $14.7m
David Seymour
Senior Vice President of Operations0.2yrsno datano data
Daniel Cravens
Managing Director of Investor Relations0yrsno datano data
Bruce Wark
VP & Deputy General Counsel5.3yrsno datano data
Elise Eberwein
Executive Vice President of People & Communications6.2yrsno data0.12% $10.1m
Alison Taylor
Senior Vice President of Global Sales & Distribution3.4yrsno datano data

6.2yrs

Average Tenure

54.5yo

Average Age

Experienced Management: AAL's management team is seasoned and experienced (6.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Parker
Chairman & CEO6.2yrsUS$12.00m0.59% $52.0m
Matthew Hart
Independent Director6.2yrsUS$316.91k0.0086% $757.4k
James Albaugh
Independent Director6.2yrsUS$291.52k0.0085% $743.4k
John Cahill
Lead Independent Director6.2yrsUS$347.89k0.029% $2.5m
Denise O'Leary
Independent Director6.2yrsUS$311.75k0.021% $1.8m
Ray Robinson
Independent Director6.2yrsUS$306.25k0.0059% $513.4k
Jeffrey Benjamin
Independent Director6.2yrsUS$320.35k0.017% $1.5m
Susan Kronick
Independent Director4.3yrsUS$308.89k0.0030% $265.9k
Michael Embler
Independent Director6.2yrsUS$302.44k0.0061% $538.9k
Martin Nesbitt
Independent Director4.3yrsUS$321.03k0.0030% $265.9k

6.2yrs

Average Tenure

61.5yo

Average Age

Experienced Board: AAL's board of directors are considered experienced (6.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AAL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

American Airlines Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: American Airlines Group Inc.
  • Ticker: AAL
  • Exchange: NasdaqGS
  • Founded: 1934
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: US$8.777b
  • Shares outstanding: 426.06m
  • Website: https://www.aa.com

Number of Employees


Location

  • American Airlines Group Inc.
  • 1 Skyview Drive
  • Fort Worth
  • Texas
  • 76155
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AALNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 2013
AAL *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 2013
A1GDB (Deutsche Boerse AG)YesCommon StockDEEURDec 2013
A1GXTRA (XETRA Trading Platform)YesCommon StockDEEURDec 2013
AALWBAG (Wiener Boerse AG)YesCommon StockATEURDec 2013
A1GSWX (SIX Swiss Exchange)YesCommon StockCHCHFDec 2013
A1GETLX (Eurotlx)YesCommon StockITEURDec 2013
0HE6LSE (London Stock Exchange)YesCommon StockGBUSDDec 2013
AALL34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REPR 1 COM SHS USD1BRBRLSep 2016

Biography

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. It provides scheduled air transportation services for passengers and cargo. As of December 31, 2018, the company operated a mainline fleet of 956 aircraft. It serves 350 destinations in approximately 50 countries, principally from its hubs in Charlotte, Chicago, Dallas/Fort Worth, London Heathrow, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. 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 1934 and is headquartered in Fort Worth, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/29 01:15
End of Day Share Price2020/02/28 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.