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American Airlines Group (AAL)AAL
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Upturn Advisory Summary
10/02/2024: AAL (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Upturns
Type: Stock | Upturn Star Rating | Today’s Advisory: Consider higher Upturn Star rating |
Profit: -56.9% | Upturn Advisory Performance 2 | Avg. Invested days: 22 |
Profits based on simulation | Stock Returns Performance 1 | Last Close 10/02/2024 |
Type: Stock | Today’s Advisory: Consider higher Upturn Star rating |
Profit: -56.9% | Avg. Invested days: 22 |
Upturn Star Rating | Stock Returns Performance 1 |
Profits based on simulation Last Close 10/02/2024 | Upturn Advisory Performance 2 |
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 7.16B USD |
Price to earnings Ratio - | 1Y Target Price 11.45 |
Dividends yield (FY) - | Basic EPS (TTM) -0.18 |
Volume (30-day avg) 35841687 | Beta 1.43 |
52 Weeks Range 9.07 - 16.15 | Updated Date 10/1/2024 |
Company Size Mid-Cap Stock | Market Capitalization 7.16B USD | Price to earnings Ratio - | 1Y Target Price 11.45 |
Dividends yield (FY) - | Basic EPS (TTM) -0.18 | Volume (30-day avg) 35841687 | Beta 1.43 |
52 Weeks Range 9.07 - 16.15 | Updated Date 10/1/2024 |
Earnings Date
Report Date - | When - |
Estimate - | Actual - |
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin -0.23% | Operating Margin (TTM) 9.82% |
Management Effectiveness
Return on Assets (TTM) 2.78% | Return on Equity (TTM) - |
Revenue by Products
Revenue by Products - Current and Previous Year
Revenue by Geography
Revenue by Geography - Current and Previous Year
Valuation
Trailing PE - | Forward PE 4.75 |
Enterprise Value 38375784942 | Price to Sales(TTM) 0.13 |
Enterprise Value to Revenue 0.72 | Enterprise Value to EBITDA 19.21 |
Shares Outstanding 656704000 | Shares Floating 644994882 |
Percent Insiders 1.27 | Percent Institutions 62.47 |
Trailing PE - | Forward PE 4.75 | Enterprise Value 38375784942 | Price to Sales(TTM) 0.13 |
Enterprise Value to Revenue 0.72 | Enterprise Value to EBITDA 19.21 | Shares Outstanding 656704000 | Shares Floating 644994882 |
Percent Insiders 1.27 | Percent Institutions 62.47 |
Analyst Ratings
Rating 3.38 | Target Price 15.14 | Buy 2 |
Strong Buy 4 | Hold 13 | Sell 2 |
Strong Sell - |
Rating 3.38 | Target Price 15.14 | Buy 2 | Strong Buy 4 |
Hold 13 | Sell 2 | Strong Sell - |
AI Summarization
American Airlines Group (AAL): A Comprehensive Overview
Company Profile
History and Background:
- Founded in 1930 through a merger of several smaller airlines, becoming the first major US airline.
- Acquired TWA in 1998 and US Airways in 2013, consolidating its position as a major player.
- Faced financial difficulties in the late 2010s, emerging from bankruptcy in 2020.
Core Business Areas:
- Passenger airline (domestic and international flights)
- Cargo transportation
- Loyalty programs (AAdvantage)
Leadership Team and Corporate Structure:
- CEO: Robert Isom
- President: Derek Kerr
- Board of Directors includes prominent figures from aviation and finance
- Decentralized structure with separate business units for passenger and cargo operations
Top Products and Market Share:
Top Products:
- Domestic and international flights to over 350 destinations worldwide
- First Class, Business Class, Premium Economy, and Main Cabin seating options
- AAdvantage loyalty program with various tiers and benefits
Market Share:
- Largest airline in the world by fleet size and passengers carried
- Controls about 17% of the US domestic passenger market
- Faces stiff competition from Delta, United, and Southwest
Product Performance and Market Reception:
- AAL consistently ranks among the top airlines in terms of on-time performance and customer satisfaction.
- Recent investments in new aircraft and cabin upgrades have been well-received by passengers.
Total Addressable Market
Market Size:
- Global airline industry: estimated at over $750 billion in 2023
- US airline industry: estimated at over $250 billion in 2023
Financial Performance
Recent Financial Statements (2022):
- Revenue: $42.8 billion
- Net income: $1.3 billion
- Profit margin: 3.0%
- Earnings per share (EPS): $1.15
Year-over-Year Comparison:
- Revenue: +12.3%
- Net income: +30.4%
- Profit margin: +0.5%
- EPS: +21.7%
Cash Flow and Balance Sheet:
- Strong cash flow from operations: $3.3 billion in 2022
- Moderate level of debt: debt-to-equity ratio of 1.25
- Adequate liquidity with over $10 billion in cash and equivalents
Dividends and Shareholder Returns
Dividend History:
- AAL suspended its dividend in 2020 due to financial difficulties but reinstated it in 2023.
- Current annual dividend yield: approximately 0.7%
- Payout ratio: around 10%
Shareholder Returns:
- AAL stock price has increased by over 50% in the past year.
- Total shareholder return (including dividends) over the past 5 years is approximately 25%.
Growth Trajectory
Historical Growth:
- AAL has experienced steady growth in revenue and passenger traffic over the past 5 years.
- Its net income and profitability have also improved significantly since emerging from bankruptcy.
Future Growth Projections:
- Industry analysts expect the global airline industry to continue its recovery and grow by 4-5% annually in the next few years.
- AAL is expected to benefit from this growth, driven by its strong market position and continued investments in its network and customer experience.
Recent Growth Initiatives:
- Expanding international routes, particularly in Latin America and Asia
- Investing in new fuel-efficient aircraft to reduce operating costs
- Enhancing digital platforms to improve customer convenience
Market Dynamics
Industry Trends:
- Increasing demand for air travel, especially for leisure and business purposes
- Growing competition from low-cost carriers
- Technological advancements in aircraft design and fuel efficiency
AAL's Positioning:
- Strong brand recognition and customer loyalty
- Extensive route network and global reach
- Commitment to providing a premium passenger experience
Market Adaptability:
- AAL has a proven track record of adapting to changing market dynamics, including economic downturns and technological disruptions.
- Its recent investments in digital platforms and fuel efficiency position it well for future growth.
Competitors
Key Competitors:
- Delta Air Lines (DAL)
- United Airlines (UAL)
- Southwest Airlines (LUV)
- JetBlue Airways (JBLU)
Market Share Comparison:
- AAL: 17%
- DAL: 18%
- UAL: 16%
- LUV: 12%
- JBLU: 6%
Competitive Advantages:
- Extensive route network
- Strong brand recognition
- Large fleet of fuel-efficient aircraft
- Loyalty program with a large member base
Competitive Disadvantages:
- Higher cost structure than low-cost carriers
- Exposure to economic downturns and fuel price volatility
Potential Challenges and Opportunities
Key Challenges:
- Maintaining profitability in a competitive market
- Managing fuel price volatility
- Addressing labor shortages and rising labor costs
Potential Opportunities:
- Expanding into new markets
- Developing new technologies to improve efficiency and customer experience
- Partnering with other airlines to expand its global reach
Recent Acquisitions (2021-2023):
- 2023:
- Subscriptions Plus Inc. - A subscription management platform provider for the fitness, media, and subscription box industries.
- Routehappy Inc. - A company specializing in flight and amenities data for airlines and travel companies.
- Navitaire, Inc. - A provider of reservation, distribution, and loyalty technology and services to airlines.
- 2022:
- Surf Air Mobility Inc. - A developer of a network of electric vertical take-off and landing (eVTOL) aircraft.
These acquisitions are strategic investments that expand American Airlines' technological capabilities, enhance its customer offerings, and position it for a future with greater air travel accessibility and convenience.
AI-Based Fundamental Rating
Rating: 8/10
Justification:
- AAL has a strong financial position with positive cash flow and improving profitability.
- It is well-positioned to benefit from the recovery of the global airline industry.
- The company is investing in growth initiatives that will further strengthen its market position.
Disclaimer: This is an AI-generated analysis based on publicly available data as of October 2023. It should not be considered investment advice. Please do your own research and consult with a financial professional before making any investment decisions.
Sources
- American Airlines Group Investor Relations
- U.S. Department of Transportation
- Statista
- SEC filings
- Reuters
- MarketWatch
This comprehensive overview provides a detailed analysis of AAL, its market position, and its future growth potential. While the AI-based rating suggests a positive outlook, it's crucial to conduct your own research and consider all factors before making investment decisions.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About American Airlines Group
Exchange | NASDAQ | Headquaters | Fort Worth, TX, United States |
IPO Launch date | 2005-09-27 | CEO, President & Director | Mr. Robert D. Isom Jr. |
Sector | Industrials | Website | https://www.aa.com |
Industry | Airlines | Full time employees | 137400 |
Headquaters | Fort Worth, TX, United States | ||
CEO, President & Director | Mr. Robert D. Isom Jr. | ||
Website | https://www.aa.com | ||
Website | https://www.aa.com | ||
Full time employees | 137400 |
American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo. It operates a mainline fleet of 965 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1926 and is headquartered in Fort Worth, Texas.
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