In the latest trading session, American Airlines (AAL) closed at $14.36, marking a -1.2% move from the previous day. This change lagged the S&P 500's daily gain of 1.59%. On the other hand, the Dow registered a gain of 1.39%, and the technology-centric Nasdaq increased by 1.63%.
Shares of the world's largest airline witnessed a loss of 14.02% over the previous month, trailing the performance of the Transportation sector with its loss of 5.85% and the S&P 500's loss of 2.42%.
The investment community will be closely monitoring the performance of American Airlines in its forthcoming earnings report. It is anticipated that the company will report an EPS of -$0.23, marking a 32.35% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $13.12 billion, reflecting a 4.41% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.42 per share and a revenue of $57.56 billion, representing changes of +23.47% and +6.19%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for American Airlines. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.87% upward. American Airlines is currently sporting a Zacks Rank of #2 (Buy).
With respect to valuation, American Airlines is currently being traded at a Forward P/E ratio of 6.01. This denotes a discount relative to the industry's average Forward P/E of 8.86.
Meanwhile, AAL's PEG ratio is currently 0.27. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Transportation - Airline was holding an average PEG ratio of 0.69 at yesterday's closing price.
The Transportation - Airline industry is part of the Transportation sector. At present, this industry carries a Zacks Industry Rank of 37, placing it within the top 15% of over 250 industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.
