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American Airlines (AAL) Suffers a Larger Drop Than the General Market: Key Insights

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In the latest market close, American Airlines (AAL - Free Report) reached $11.03, with a -1.25% movement compared to the previous day. The stock's change was less than the S&P 500's daily loss of 0.29%. At the same time, the Dow lost 0.25%, and the tech-heavy Nasdaq lost 0.31%.

The the stock of world's largest airline has risen by 8.55% in the past month, leading the Transportation sector's gain of 4.32% and the S&P 500's gain of 1.57%.

The upcoming earnings release of American Airlines will be of great interest to investors. The company is forecasted to report an EPS of $0.04, showcasing an 89.47% downward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $13.47 billion, showing a 0.12% drop compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.07 per share and revenue of $53.55 billion, indicating changes of -59.62% and +1.44%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for American Airlines. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 past month, there's been a 10.89% rise in the Zacks Consensus EPS estimate. As of now, American Airlines holds a Zacks Rank of #3 (Hold).

Investors should also note American Airlines's current valuation metrics, including its Forward P/E ratio of 10.4. Its industry sports an average Forward P/E of 10.4, so one might conclude that American Airlines is trading at no noticeable deviation comparatively.

It is also worth noting that AAL currently has a PEG ratio of 0.28. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Transportation - Airline industry had an average PEG ratio of 1.07.

The Transportation - Airline industry is part of the Transportation sector. Currently, this industry holds a Zacks Industry Rank of 182, positioning it in the bottom 29% of all 250+ industries.

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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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