Yahoo Finance American Airlines (AAL) Stock Sinks As Market Gains: Here's Why
American Airlines (AAL) closed the most recent trading day at $11.28, moving -1.83% from the previous trading session. The stock fell short of the S&P 500, which registered a gain of 0.27% for the day. Meanwhile, the Dow lost 0.31%, and the Nasdaq, a tech-heavy index, added 0.88%.
The world's largest airline's stock has dropped by 23.04% in the past month, falling short of the Transportation sector's loss of 3.57% and the S&P 500's gain of 2.85%.
Market participants will be closely following the financial results of American Airlines in its upcoming release. The company is forecasted to report an EPS of $1.11, showcasing a 42.19% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $14.55 billion, reflecting a 3.5% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.14 per share and a revenue of $55.21 billion, indicating changes of -19.25% and +4.59%, respectively, from the former year.
Any recent changes to analyst estimates for American Airlines should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 16.03% lower. American Airlines is currently sporting a Zacks Rank of #3 (Hold).
With respect to valuation, American Airlines is currently being traded at a Forward P/E ratio of 5.38. This expresses a discount compared to the average Forward P/E of 8.94 of its industry.
Also, we should mention that AAL has a PEG ratio of 0.2. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Transportation - Airline industry was having an average PEG ratio of 0.83.
The Transportation - Airline industry is part of the Transportation sector. This industry, currently bearing a Zacks Industry Rank of 171, finds itself in the bottom 33% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow AAL in the coming trading sessions, be sure to utilize Zacks.com.
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American Airlines Group Inc. (AAL) : Free Stock Analysis Report
