American Airlines Misses Q4 Earnings Expectations, Shares Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: Fool
- Earnings Miss: American Airlines Group reported Q4 earnings that fell short of analyst expectations on both revenue and profit, leading to a 7% drop in share price to $13.55, reflecting market concerns about its financial health.
- External Pressures: Management indicated that the U.S. government shutdown resulted in a $325 million loss in Q4, while winter storm Fern is expected to impact Q1 results by approximately $175 million, exacerbating pessimism about the company's outlook.
- Surge in Trading Volume: Today's trading volume reached 100.9 million shares, about 82% above the three-month average of 55.5 million shares, indicating heightened investor scrutiny and volatility in market sentiment regarding the company's financial status.
- Future Outlook: Although the company anticipates generating $2 billion in free cash flow by 2026 and has paid down over $2 billion of its long-term debt, ongoing external challenges are diminishing investor confidence in airline stocks.
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Analyst Views on AAL
Wall Street analysts forecast AAL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AAL is 17.44 USD with a low forecast of 10.00 USD and a high forecast of 21.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
7 Buy
7 Hold
1 Sell
Moderate Buy
Current: 13.440
Low
10.00
Averages
17.44
High
21.00
Current: 13.440
Low
10.00
Averages
17.44
High
21.00
About AAL
American Airlines Group Inc. is a holding company. Its primary business activity is the operation of a major network air carrier, providing scheduled air transportation for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. and partner gateways, including in London, Doha, Madrid, Seattle/Tacoma, Sydney and Tokyo, among others. Together with its regional airline subsidiaries and third-party regional carriers operating as American Eagle. Its cargo division provides a wide range of freight and mail services, with facilities and interline connections available across the globe. It operates approximately 977 mainline aircraft supported by its regional airline subsidiaries and third-party regional carriers, which together operate an additional 585 regional aircraft. Its subsidiaries include American Airlines, Inc., Envoy Aviation Group Inc., PSA Airlines, Inc. and Piedmont Airlines, Inc.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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