What Can We Learn From American Airlines Group Inc. (AAL)’s Valuation Ratios?

American Airlines Group Inc. (NASDAQ:AAL) finished Tuesday with an addition of $0.08 to close at $21.47, an upside of 0.37 percent. An average of 26,436,262 shares of common stock have been traded in the last five days. There was a gain of $0.04 in the past week. The last 20 days have seen an average of 34,644,684 shares traded, while the 50-day average volume stands at 30,389,953.

AAL stock has increased by 10.84% in the last month. The company shares reached their 1-month lowest point of $18.64 on 09/13/21. With the stock rallying to its 52-week high on 03/18/21, shares of the company touched a low of $10.63 and a high of $26.09 in 52 weeks. In spite of this, the price is down -17.71% from the 52-week high.

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Valuation Metrics

American Airlines Group Inc. (AAL) has a trailing price-to-earnings (P/E) ratio of 18.35 for the broader industry and 28.38 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, American Airlines Group Inc.’s PE ratio has ranged between 14.30 and 2.690. The stock’s beta is 1.71. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.71.

The quick ratio of American Airlines Group Inc. for the three months ended June 29 was 1.00, and the current ratio was 1.10, indicating that the company is able to meet its debt obligations. On the profitability front, the trailing 12-month gross margin is 47.80% against a 5-year average of 11.4%. American Airlines Group Inc.’s EBITDA margin for the year ending June 29 is -52.04%, while its operating margin for the same period stands at -33.50%. Its gross profit as reported stood at -$7.6 billion compared to revenue of $17.34 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, American Airlines Group Inc.’s return on assets was -8.70%, compared to -0.3% over the last five years.

Technical Picture

From a technical analysis perspective, let’s take a brief look at American Airlines Group Inc. (AAL) price momentum. RSI 9-day as of the close on 05 October was 60.70%, suggesting the stock is Neutral, with historical volatility in this time frame at 35.83%.

As of today, AAL’s price is $21.21 +0.19% or $0.04 from its 5-day moving average. AAL is currently trading +9.93% higher than its 20-day SMA and +1.23% higher than its 100-day SMA. However, the stock’s current price level is -2.76% below the SMA50 and +27.80% above the SMA200.

The stochastic %K and %D were 78.22% and 72.31%, respectively, and the average true range (ATR) was 0.80. With the 14-day stochastic at 74.91% and the average true range at 0.80, the RSI (14) stands at 58.44%. The stock has reached 0.26 on the 9-day MACD Oscillator while the 14-day reading was at 0.68.

Analyst Ratings

Redburn launched coverage on American Airlines Group Inc. (NASDAQ: AAL) in its analyst report released on August 11, 2021. The firm assigned the stock a a Buy rating.The consensus rating for American Airlines Group Inc. (AAL) among analysts is Hold. According to current brokerage recommendations, 7 brokerage firms advise that investors sell AAL, while 8 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 4 others rate it as a “buy”.

What is AAL’s price target for the next 12 months?

Analysts predict a range of price targets between $5.00 and $28.00, with a median target of $20.00. Taking a look at these predictions, the average price target given by analysts for American Airlines Group Inc. (AAL) stock is $19.21.


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