In the latest trading session, American Airlines (AAL) closed at $17.87, marking a +1.71% move from the previous day. The stock’s performance was ahead of the S&P 500’s daily loss of 0.05%. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq depreciated by 0.24%.
Heading into today, shares of the world’s largest airline had gained 19.93% over the past month, outpacing the Transportation sector’s gain of 5.43% and the S&P 500’s loss of 1.42%.
The investment community will be closely monitoring the performance of American Airlines in its forthcoming earnings report. The company is predicted to post an EPS of $0.06, indicating a 93.68% decline compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.66 billion, up 15.79% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.13 per share and a revenue of $61.97 billion, indicating changes of -63.89% and +13.43%, respectively, from the former year.
Investors might also notice recent changes to analyst estimates for American Airlines. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 167.09% upward. American Airlines currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, American Airlines is currently exchanging hands at a Forward P/E ratio of 137.03. This denotes a premium relative to the industry average Forward P/E of 11.79.
The Transportation – Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 210, which puts it in the bottom 14% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
