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1. Company Snapshot

1.a. Company Description

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, Madrid, Seattle/Tacoma, Sydney, and Tokyo.As of December 31, 2021, it operated a mainline fleet of 865 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 1930 and is headquartered in Fort Worth, Texas.

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1.b. Last Insights on AAL

American Airlines' recent performance was driven by strong Q3 results, beating EPS and revenue expectations. The company's better-than-expected guidance for Q4, with EPS between $0.45 and $0.75, also boosted investor sentiment. Additionally, a potential end to the government shutdown could be a catalyst for a breakout. The company's presentation at upcoming conferences, including the Goldman Sachs Industrials and Materials Conference, may also contribute to its positive momentum. Brokerages view AAL as a promising stock, citing its strong performance amidst market volatility.

1.c. Company Highlights

2. American Airlines' Q3 Loss Narrows on Stronger Revenue

American Airlines reported an adjusted pretax loss of $139 million for Q3 2025, or a loss of $0.17 per share, which beat estimates of a loss of $0.27 per share. The company's revenue performance was stronger than expected, with record Q3 revenue of $13.7 billion, up 1% from the midpoint of initial guidance. The revenue growth was driven by a strong domestic performance, with year-over-year PRASM improving sequentially each month and turning positive in September.

Publication Date: Oct -27

📋 Highlights
  • Q3 Adjusted Pretax Loss:: American Airlines reported a $139 million loss ($0.17/share), aligning with the upper end of its July guidance.
  • Q3 Revenue Growth:: Record revenue of $13.7 billion, exceeding the midpoint of initial guidance by 1% year-over-year.
  • Capital Expenditures:: $3.8 billion in 2025 capex, including 51 new aircraft deliveries, with a $4 billion debt reduction target by 2027.
  • Premium Cabin Performance:: Premium cabin load factor reached 65%, outperforming main cabin by 5pp, contributing nearly 50% of total ticket revenue.
  • Q4 Outlook:: 3-5% year-over-year revenue growth and flat unit revenue, with adjusted operating margin guidance of 5-7% and $0.45–$0.75 EPS.

Segment Performance

The company's international entities performed in line with guidance, with Atlantic being the most profitable region. Latin America unit revenues were down year-over-year due to an oversupplied short-haul market, while Pacific unit revenue declined mid-single digits. Premium unit revenue continues to outperform main cabin, with a 5-point advantage in Q3.

Outlook and Guidance

American Airlines expects Q4 revenue to be up 3-5% year-over-year, with capacity up 3-5% as well. This implies flat unit revenue in Q4, after being down 2.7% in Q2 and 1.9% in Q3. The company expects an adjusted operating margin of 5-7% and earnings per share of $0.45-$0.75 in Q4, resulting in a full-year EPS guidance of $0.65-$0.95 per share.

Valuation and Growth Prospects

The company's valuation metrics indicate a challenging financial situation, with a P/E Ratio of 15.12 and a P/S Ratio of 0.17. However, the Free Cash Flow Yield is 33.34%, indicating a potential for future growth. Analysts estimate next year's revenue growth at 5.9%. Robert Isom, CEO, noted that he prioritizes investments that improve customer experience, citing examples such as a new coffee brand, Lavazza, which was introduced without considerable additional cost.

Growth Strategy and Cost Management

American Airlines plans to prioritize growth in New York, Chicago, Phoenix, Miami, and Philadelphia in 2026. The company aims to balance growth with efficient operations and a focus on customer experience to address increasing costs, including labor expenses. The airline has a $1 billion labor cost disadvantage to competitors but expects to improve margins through its efforts.

Premium Demand and Loyalty Program

The company is focused on premium demand, seeing significant yields from business travelers, who are frequent flyers and tend to be loyal to the airline. Business travel is currently at 80% of 2019 levels, offering upside potential. The loyalty program is expected to drive $1.5 billion of net income.

3. NewsRoom

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American Airlines Hopes New Airbus A321XLR Will Move It Closer To Delta

Dec -04

Source: forbes.com

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2025's Takeoffs & Touchdowns for Airline Stocks, Outlook for 2026

Dec -04

Source: youtube.com

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Citi Initiates Airline Stocks As A Buy, But Says Sell This One

Dec -04

Source: investors.com

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Stock Market Live December 4: S&P 500 (SPY) Flat Ahead of Potential Rate Cuts

Dec -04

Source: 247wallst.com

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American Airlines Group Inc. (AAL) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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Saker Aviation Services (OTCMKTS:SKAS) vs. American Airlines Group (NASDAQ:AAL) Head-To-Head Survey

Dec -03

Source: defenseworld.net

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Sean Duffy Says DOT Working To Deliver Revamped Air Traffic Control System, Reiterates Dressing Up For Travel — Gavin Newsom Responds

Dec -03

Source: feeds.benzinga.com

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Airport Traffic Hits US Record Sunday After Thanksgiving: Will Airline Stocks Take Flight Into 2026?

Dec -02

Source: benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.41%)

6. Segments

Passenger Travel

Expected Growth: 4.5%

The 4.5% growth in Passenger Travel from American Airlines Group Inc. is driven by increasing demand for air travel, fueled by a strong US economy, rising consumer spending, and a growing middle class. Additionally, American Airlines' strategic efforts to enhance customer experience, expand route networks, and invest in digital technologies have contributed to the growth.

Loyalty Revenue - Travel

Expected Growth: 3.8%

The 3.8% growth in Loyalty Revenue - Travel from American Airlines Group Inc. is driven by increased AAdvantage loyalty program membership, higher redemption rates, and strategic partnerships with hotels and car rental companies, resulting in more bookings and revenue. Additionally, enhanced customer experiences and personalized offers contribute to the growth.

Loyalty Revenue - Marketing Services

Expected Growth: 4.2%

American Airlines' 4.2% growth in Loyalty Revenue - Marketing Services is driven by increased demand for AAdvantage loyalty program, strategic partnerships with credit card companies, and effective targeted marketing campaigns, resulting in higher redemption rates and new member acquisitions.

Cargo

Expected Growth: 3.5%

The 3.5% growth in cargo from American Airlines Group Inc. is driven by increasing e-commerce demand, rising air freight rates, and a strong US economy. Additionally, the airline's investments in digitalization and expansion of its cargo network have improved operational efficiency, further boosting growth.

Other

Expected Growth: 3.2%

American Airlines' 'Other' segment growth of 3.2% is driven by increased demand for cargo services, higher revenue from loyalty program sales, and growth in airport and baggage fees. Additionally, the company's investments in digital transformation and cost-saving initiatives have improved operational efficiency, contributing to the segment's growth.

7. Detailed Products

Scheduled Passenger Flights

American Airlines operates a vast network of scheduled passenger flights to over 350 destinations worldwide, offering a range of fare options and amenities.

Cargo Services

American Airlines Cargo provides air freight services to transport goods, including perishables, pharmaceuticals, and other specialty items.

AAdvantage Loyalty Program

AAdvantage is American Airlines' loyalty program, offering rewards, upgrades, and benefits to frequent flyers.

Airport Lounges

American Airlines operates airport lounges, offering a comfortable and convenient space for passengers to relax and work.

Travel Insurance

American Airlines offers travel insurance options to protect passengers against trip cancellations, interruptions, and medical emergencies.

Vacation Packages

American Airlines Vacations offers bundled travel packages, including flights, hotels, and car rentals.

Meetings and Events

American Airlines provides customized travel solutions for corporate meetings, conferences, and events.

8. American Airlines Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

American Airlines Group Inc. faces moderate threat from substitutes, as customers have limited alternatives for long-haul flights, but can choose other modes of transportation for shorter distances.

Bargaining Power Of Customers

American Airlines Group Inc. has a large customer base, but individual customers have limited bargaining power due to the airline's large scale of operations.

Bargaining Power Of Suppliers

American Airlines Group Inc. has a diverse supplier base, and no single supplier has significant bargaining power over the airline.

Threat Of New Entrants

The airline industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to join the market.

Intensity Of Rivalry

The airline industry is highly competitive, with multiple players competing for market share, leading to intense rivalry among airlines.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 117.93%
Debt Cost 7.19%
Equity Weight -17.93%
Equity Cost 11.40%
WACC 6.44%
Leverage -657.65%

11. Quality Control: American Airlines Group Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Air Canada

A-Score: 5.1/10

Value: 7.8

Growth: 6.2

Quality: 4.4

Yield: 0.0

Momentum: 5.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Dycom Industries

A-Score: 5.0/10

Value: 2.4

Growth: 8.0

Quality: 4.9

Yield: 0.0

Momentum: 9.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Aramark

A-Score: 4.6/10

Value: 4.3

Growth: 4.3

Quality: 3.4

Yield: 2.0

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Southwest Airlines

A-Score: 4.6/10

Value: 6.4

Growth: 3.0

Quality: 3.8

Yield: 3.0

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Alaska Air

A-Score: 4.2/10

Value: 6.5

Growth: 4.7

Quality: 3.4

Yield: 0.0

Momentum: 6.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
American Airlines

A-Score: 4.0/10

Value: 7.9

Growth: 4.8

Quality: 3.8

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.65$

Current Price

14.65$

Potential

-0.00%

Expected Cash-Flows