In the latest close session, American Airlines (AAL) was down 2.94% at $12.53. This change lagged the S&P 500's 0.47% gain on the day. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq gained 0.94%.
Prior to today's trading, shares of the world's largest airline had lost 1.97% lagged the Transportation sector's loss of 0.44% and the S&P 500's gain of 2.32%.
The upcoming earnings release of American Airlines will be of great interest to investors. The company is expected to report EPS of -$0.26, down 186.67% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $13.62 billion, indicating a 0.23% decrease compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $0.42 per share and revenue of $54.47 billion, which would represent changes of -78.57% and +0.48%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for American Airlines. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 11.91% decrease. American Airlines currently has a Zacks Rank of #4 (Sell).
In the context of valuation, American Airlines is at present trading with a Forward P/E ratio of 30.61. This denotes a premium relative to the industry average Forward P/E of 10.47.
We can also see that AAL currently has a PEG ratio of 3.33. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Transportation - Airline stocks are, on average, holding a PEG ratio of 0.81 based on yesterday's closing prices.
The Transportation - Airline industry is part of the Transportation sector. With its current Zacks Industry Rank of 55, this industry ranks in the top 23% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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American Airlines Group Inc. (AAL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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