American Airlines (AAL) Rated as a 'Buy' at Citi on Strong Premium Demand

American Airlines Group Inc. (NASDAQ:AAL) is one of the best airline stocks to buy according to hedge funds. On June 26, Citi reiterated a ‘Buy’ rating on the stock and an $18.25 price target. The research firm remains confident about the airline’s long-term prospects amid a resilient international long-haul and premium demand in the sector.

Nevertheless, Citi has warned about softness in the domestic main cabin demand across the entire airline sector, which could affect margins. However, the research firm has touted American Airlines’ operations and balance sheet, which are seen as moving in the right direction.

Citi expects American Airlines to benefit from significant co-branded card remuneration. Additionally, it has reflected declining leverage, which is a positive indicator of the airline’s financial health. According to the research firm, the company’s earnings leverage and free cash flow have improved significantly from the lows experienced in 2020/2021.

American Airlines Group Inc. (NASDAQ:AAL) is a major airline that provides passenger and cargo air transportation services. It operates an extensive network of domestic and international flights, serving over 350 destinations in more than 60 countries. In addition to flights, American Airlines also offers services such as baggage handling and ground services, and operates the AAdvantage loyalty program.

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Disclosure: None. This article is originally published at Insider Monkey.