We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American Airlines (AAL) Q2 Earnings Likely to Disappoint
Read MoreHide Full Article
American Airlines Group Inc. (AAL - Free Report) is slated to release second-quarter 2016 results on Jul 22, before market opens. The company posted an earnings surprise of 5.93% in the last quarter. Moreover, the company recorded an earnings surprise in each of the last four quarters, with an average surprise of 2.74%. It remains to be seen how the company performs this time.
Factors at Play this Quarter
American Airlines has been dealt a heavy blow by the recent terror attacks, macroeconomic issues and dull second-quarter outlook. Additionally, the Brexit episode is expected to create additional pressure on major U.S. airline stocks such as American Airlines, United Continental Holdings, Inc. (UAL - Free Report) ) and Delta Air Lines Inc. (DAL - Free Report) . Another matter of concern is the decline in load factor in June as capacity outpaced traffic growth. An expected decline of 6--7% in consolidated passenger revenue per available seat mile (PRASM) in the second quarter is not encouraging.
The company might see some respite from low oil prices with pretax margin excluding special items expected in the range of 14 -16%. However, we expect below-par results especially with respect to the top line in the second quarter.
Our proven model does not conclusively show that American Airlines is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.57. Hence, the ESP is 0.00%.
Zacks Rank: The company carries a Zacks Rank #5 (Strong Sell). Please note that we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions as is the case with American Airlines.
Stocks to Consider
Here is a stock you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter.
Latam Airlines Group S.A. has an Earnings ESP of over 100% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
American Airlines (AAL) Q2 Earnings Likely to Disappoint
American Airlines Group Inc. (AAL - Free Report) is slated to release second-quarter 2016 results on Jul 22, before market opens. The company posted an earnings surprise of 5.93% in the last quarter. Moreover, the company recorded an earnings surprise in each of the last four quarters, with an average surprise of 2.74%. It remains to be seen how the company performs this time.
Factors at Play this Quarter
American Airlines has been dealt a heavy blow by the recent terror attacks, macroeconomic issues and dull second-quarter outlook. Additionally, the Brexit episode is expected to create additional pressure on major U.S. airline stocks such as American Airlines, United Continental Holdings, Inc. (UAL - Free Report) ) and Delta Air Lines Inc. (DAL - Free Report) . Another matter of concern is the decline in load factor in June as capacity outpaced traffic growth. An expected decline of 6--7% in consolidated passenger revenue per available seat mile (PRASM) in the second quarter is not encouraging.
The company might see some respite from low oil prices with pretax margin excluding special items expected in the range of 14 -16%. However, we expect below-par results especially with respect to the top line in the second quarter.
AMER AIRLINES Price and EPS Surprise
AMER AIRLINES Price and EPS Surprise | AMER AIRLINES Quote
Earnings Whispers
Our proven model does not conclusively show that American Airlines is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.57. Hence, the ESP is 0.00%.
Zacks Rank: The company carries a Zacks Rank #5 (Strong Sell). Please note that we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions as is the case with American Airlines.
Stocks to Consider
Here is a stock you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter.
Latam Airlines Group S.A. has an Earnings ESP of over 100% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>