The exact reason why investors have been taking up American Airlines Group Inc. (NASDAQ:AAL) stock at a frenetic pace might seem like a bit of a head-scratcher at the moment, but that’s only if you are buying the stock for the wrong reasons. On 06 December, the shares accumulated 0.25 points or 0.68 percent at $36.94 with a heavy trade volume of 9.342 million shares. After opening the session at $36, the shares went as high as $37.1 and as low as $35.79, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $17 billion and now has 460.53 million shares outstanding. American Airlines Group Inc. (AAL) stock has gained 3.42 percent of market value in 21 trading days.
AAL stock has a trailing 3-year beta of 1.13, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.62 a share in the trailing twelve months. The stock’s value has fallen -29 percent year to date (YTD) against a decline of -25.33 percent in 12 month’s time. The company’s shares still trade -37.47 percent away from its 1-year high of $59.08 and 22.16 percent up from 52-week low of $30.24. The average consensus rating on the company is 1.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.
American Airlines Group Inc. (AAL) will probably climb 27.8 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $70-month high price target. This represents a whopping 89.5 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $46, which represents a return potential of 24.53 percent when compared to the closing price of the stock of $36.94 on Thursday, December 06. The lowest price target for the stock is $37 — slightly more than 0.16 percent from AAL’s current share price.
History has shown that shares in American Airlines Group Inc. have gone down on 11 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of AAL’s Q4 earnings on January 25. Analysts are forecasting revenue to climb 4.5 percent to $11.1B in the fiscal fourth quarter, while earnings are seen soaring by nearly 11.58 percent to $1.06 per share. It earned $1.13 per share, in line with the $1.13, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $11.6B, in line with the $11.6B analysts expected. Earnings are estimated to increase by 16.2 percent this year, 16.97 percent next year and continue to increase by 8.74 percent annually for the next 5 years.
Let’s take a look at some insider activity at American Airlines Group Inc. (NASDAQ:AAL) and see the pattern. The earliest insider trade took place on 11/19/2018. Benjamin Jeffrey D gathered a total of 15 thousand shares of company at average share price of $35.69. The total for the purchase was set at $535.35 thousand. After this transaction, the Director account balance stood at 72.15 thousand shares. The stock grew 2.8 percent since that insider purchase. On 10/29/2018, Cahill John T, Director, purchased 25 thousand shares at a price per share of $33.47. This added 836.75 thousand shares to the insider’s fortune and the stock saw a 9.62 percent rally in value since the news became public. This transaction left 72.15 thousand shares in the Director account.
On 05/22/2018, President Isom Robert D Jr performed a sale transaction worth $450 thousand. This sale at $45 each has eliminated 10 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -18.47 percent decrease since the transaction was reported. The insider now is left with 646.21 thousand shares remaining in the account. Isom Robert D Jr, who performs the President job, sold 5 thousand shares for $233.6 thousand. The disposal occurred on 04/24/2018 was priced at $46.72 per share. The share price plunged -21.47 percent since the reporting date. Isom Robert D Jr now left with a stake of 670.28 thousand AAL stock worth $24.76 million after the insider selling.
The stock is currently hovering around the first support level of $36.12. Below this, the next support is placed in the zone of $35.3. Till the time, the AAL stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 48.78 on daily chart, which may remain a cause for concern. If the price breaks below $35.3 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $37.43 mark may result into a pull-back move towards $37.92 level.
Shares of American Airlines Group Inc. (AAL) are trading at a P/E ratio of 12.69 times earnings reported for the past 12 months. The industry AAL operates in has an average P/E of 13.56. Its P/E ratio went as low as 3.83X and as high as 13.66 over the 5-year span.Further, it is sporting a 0.38 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1. 61.5 percent is the gross profit margin for American Airlines Group Inc. and operating margin sits at 6.3 percent. Along with this, the net profit margin is 3.1 percent.