What to Expect From American Airlines’ Next Quarterly Earnings Report

Texas-based American Airlines Group Inc. (AAL) is the largest international airline. It operates through its wholly-owned subsidiaries, including American Airlines, Envoy Aviation Group, PSA Airlines, and Piedmont Airlines, providing passenger and cargo services. Its market cap currently stands at $7.2 billion. AAL is scheduled to release its fiscal 2024 Q2 earnings results before the market opens on Thursday, Jul. 18. 

Ahead of the event, analysts expect American Airlines to report a profit of $1.06 per share, down 44.8% from $1.92 per share in the year-ago quarter. The company has exceeded Wall Street’s EPS estimates in three of the last four quarters, missing on one occasion.

In the last reported quarter, AAL experienced a substantial year-over-year increase in its loss per share, amounting to $0.34. The result fell short of the consensus estimate by 21.4%, influenced by macroeconomic challenges and ongoing quality control and safety issues with Boeing aircraft.

Analysts anticipate American Airlines to post an EPS of $2.07 for fiscal 2024, reflecting a 21.9% decrease from $2.65 in fiscal year 2023. Looking further ahead, fiscal 2025 is expected to see a rebound, with its EPS projected to rise by 34.8% annually to $2.79.

Over the past 52 weeks, AAL stock has fallen by 39.7%, trailing behind the broader S&P 500 Index's ($SPX) 25.2% gains and the Industrial Select Sector SPDR Fund’s (XLI) 13.5% returns during the same period.

American Airlines failed to meet the consensus topline and bottom-line estimates in Q1, but its second-quarter forecast of $1.15 to $1.45 per share exceeded analysts' average estimate of $1.18. The airline also reiterated its full-year earnings forecast of $2.25 to $3.25 per share. American Airlines’ CEO Robert Isom expressed confidence in meeting these targets despite challenges, including Boeing Company's (BA) aircraft delivery delays. The stock rose 1.5% following its Q1 earnings release on April 25.

While the Transportation Security Administration predicts this summer will be the busiest U.S. travel season on record, AAL reduced its Q2 earnings expectation to a range of $1 to $1.15 on May 28, sending the stock down 2.9% and 13.5% on the following trading session. Furthermore, the departure of Chief Commercial Officer Vasu Raja, who led a controversial "modern retailing" initiative, has compounded challenges for the company.

However, the current consensus opinion on American Airlines stock is “Moderate Buy” overall. Out of 18 analysts covering the stock, eight suggest a “Strong Buy,” eight recommend a “Hold,” one advises a “Moderate Sell,” and one suggests a “Strong Sell.”

Furthermore, the average analyst price target for AAL is $15.47, indicating a potential upside of 40.1% from the current price levels.

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