American Airlines Projects Revenue Growth for 2026
Written by Emily J. Thompson, Senior Investment Analyst
Source: CNBC
- Revenue Growth Outlook: American Airlines projects nearly $2 improvement in adjusted earnings per share for 2026, indicating a strategic focus on high-spending customers to close the gap with more profitable rivals amid strong demand.
- Quarterly Performance Review: Despite fourth-quarter adjusted earnings per share of 16 cents falling short of the expected 34 cents and revenue of $14 billion slightly below the $14.03 billion forecast, the company achieved a 2.5% year-over-year revenue increase, demonstrating market resilience.
- Government Shutdown Impact: The airline reported approximately $325 million revenue loss due to the government shutdown in the fourth quarter, although bookings rebounded quickly post-shutdown, highlighting the market's recovery potential.
- Flight Cancellations Effect: The recent winter storm led to the largest flight cancellations since the pandemic, resulting in a 1.5 percentage point reduction in first-quarter 2026 capacity guidance and an estimated revenue impact of $150 million to $200 million, reflecting external challenges to operations.
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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.
American Airlines Q4 2025 Earnings Call Insights
- Operational Challenges: American Airlines faced over 9,000 flight cancellations due to Winter Storm Fern, yet CEO Robert Isom highlighted the company's balance sheet as the strongest in years, demonstrating resilience amid adversity.
- Financial Performance: The airline reported an adjusted EPS of $0.16 for Q4 and $0.36 for the full year, with a revenue impact of approximately $325 million from the government shutdown, indicating a need for improvement in profitability under challenging conditions.
- Future Outlook: CFO Devon May projected a 7% to 10% year-over-year revenue increase for Q1 2026, with significant capacity growth planned in Philadelphia, Miami, and Phoenix, reflecting the company's confidence in future growth.
- Capital Expenditure Plans: Projected CapEx for 2026 is between $4 billion and $4.5 billion, with free cash flow expected to exceed $2 billion, indicating a proactive strategy in expansion and debt management, aiming to reduce total debt below $35 billion by 2026, a year ahead of schedule.
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