Is American Airlines Group Inc. (AAL) A Risky Investment?


American Airlines Group Inc. (NASDAQ:AAL) finished Thursday with a subtraction of -$0.52 to close at $12.71, a downside of -3.93 percent. An average of 33,766,320 shares of common stock have been traded in the last five days. There was a fall of -$1.56 in the past week, and it reached a new high 4 times over the past 12 months. The last 20 days have seen an average of 28,729,641 shares traded, while the 50-day average volume stands at 29,160,080.

AAL stock has decreased by -8.03% in the last month. The company shares reached their 1-month lowest point of $12.50 on 09/01/22. With the stock rallying to its 52-week high on 04/21/22, shares of the company touched a low of $11.93 and a high of $22.35 in 52 weeks. It has reached a new high 7 times so far this year and lost -29.23% or -$5.25 in price. In spite of this, the price is down -43.13% from the 52-week high.

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Insider Transactions

43 days have passed since American Airlines Group Inc. (AAL) last reported insider trading activity. Raja Vasu, who is SVP, Chief Commercial Officer, most recently acquired $12,678 shares at $14.98 per share on Aug 11.

Valuation Metrics

American Airlines Group Inc. (AAL) stock’s beta is 1.49. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.21.

Financial Health

The quick ratio of American Airlines Group Inc. for the three months ended June 29 was 0.70, and the current ratio was 0.80, indicating that the company is not able to meet its debt obligations. Its gross profit as reported stood at $2.05 billion compared to revenue of $29.88 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 -2.80%.

Earnings Surprise

For the three-month period that ended June 29, American Airlines Group Inc. had $14.24 billion in cash and short-term investments compared to $36.05 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $169.0 million in the quarter, while revenues were grew 1519.53%. The analyst consensus anticipated American Airlines Group Inc.’s latest quarter earnings to come in at $0.76 per share, but it turned out to be $0.76, a 0.00% surprise. For the quarter, EBITDA amounted to $1.02 billion. Shareholders own equity worth $649.85 million.

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 22 September was 34.06%, suggesting the stock is Neutral, with historical volatility in this time frame at 53.11%.

As of today, AAL’s price is $13.57 -10.93% or -$1.56 from its 5-day moving average. AAL is currently trading -9.15% lower than its 20-day SMA and -32.29% lower than its 100-day SMA. However, the stock’s current price level is -11.18% below the SMA50 and -29.11% below the SMA200.

The stochastic %K and %D were 36.74% and 54.95%, respectively, and the average true range (ATR) was 0.64. With the 14-day stochastic at 8.84% and the average true range at 0.62, the RSI (14) stands at 38.34%. The stock has reached -0.51 on the 9-day MACD Oscillator while the 14-day reading was at -0.45.

Analyst Ratings

Argus downgraded American Airlines Group Inc. (NASDAQ: AAL) to a a Hold rating in its most recent analyst report. Previously, the stock was rated as a Buy. The consensus rating for American Airlines Group Inc. (AAL) among analysts is Hold. According to current brokerage recommendations, 2 brokerage firms advise that investors sell AAL, while 14 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 1 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 $8.00 and $28.00, with a median target of $16.00. Taking a look at these predictions, the average price target given by analysts for American Airlines Group Inc. (AAL) stock is $17.21.


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