American Airlines (AAL) closed at $11.26 in the latest trading session, marking a -1.92% move from the prior day. This change lagged the S&P 500's daily loss of 0.22%. Elsewhere, the Dow saw a downswing of 0.03%, while the tech-heavy Nasdaq depreciated by 0.33%.
The world's largest airline's shares have seen a decrease of 28.25% over the last month, not keeping up with the Transportation sector's loss of 5.62% and the S&P 500's loss of 7.48%.
The investment community will be paying close attention to the earnings performance of American Airlines in its upcoming release. The company's earnings per share (EPS) are projected to be -$0.45, reflecting a 32.35% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $12.58 billion, up 0.04% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.18 per share and revenue of $57.09 billion, which would represent changes of +11.22% and +5.3%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for American Airlines. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 9.69% decrease. American Airlines is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, American Airlines currently has a Forward P/E ratio of 5.26. This represents a discount compared to its industry's average Forward P/E of 8.47.
We can additionally observe that AAL currently boasts a PEG ratio of 0.25. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Transportation - Airline industry held an average PEG ratio of 0.66.
The Transportation - Airline industry is part of the Transportation sector. Currently, this industry holds a Zacks Industry Rank of 59, positioning it in the top 24% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
