Yahoo Finance Is American Airlines (AAL) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is American Airlines (AAL). AAL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.30, which compares to its industry's average of 9.56. Over the last 12 months, AAL's Forward P/E has been as high as 9,493.45 and as low as -3,032.07, with a median of 11.59.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AAL has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.44.
Finally, we should also recognize that AAL has a P/CF ratio of 4.27. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AAL's P/CF compares to its industry's average P/CF of 9.60. AAL's P/CF has been as high as 34.45 and as low as -305.42, with a median of 11.85, all within the past year.
Investors could also keep in mind International Consolidated Airlines Group (ICAGY), an Transportation - Airline stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Furthermore, International Consolidated Airlines Group holds a P/B ratio of 1.09 and its industry's price-to-book ratio is 4.41. ICAGY's P/B has been as high as 3.86, as low as 1.09, with a median of 1.35 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Airlines and International Consolidated Airlines Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAL and ICAGY feels like a great value stock at the moment.
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American Airlines Group Inc. (AAL) : Free Stock Analysis Report
International Consolidated Airlines Group SA (ICAGY) : Free Stock Analysis Report
