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American Airlines Group (AAL) Up on Raised Q1 TRASM View
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Shares of Fort Worth, TX-based American Airlines Group (AAL - Free Report) rallied on Apr 11 following a guidance revision. The stock closed the last trading session at $43.93, up 3.8% from the previous day’s closing. The upbeat guidance was issued by the company while releasing its March traffic data.
The carrierposted a decline in air traffic in the month of March. Traffic – measured in revenue passenger miles (RPMs) – was 18.8 billion, down 1.2% from the year-ago figure in the same month.
On a year-over-year basis, consolidated capacity (available seat miles/ASMs) fell 0.9% to 23 billion. Load factor or percentage of seats filled by passengers decreased 200 basis points (bps) to 81.5% due to greater reduction in traffic compared with capacity contraction.
In the first three months of 2017, American Airlines recorded a 1.5% fall in RPMs to 51 billion, while ASMs declined 1.1% to 64.3 billion, both on a year-over-year basis. Also, the load factor declined 400 bps year over year to 79.2%. Moreover, total passenger count (Enplanements) fell 0.5% and 1.2% in the month of March and the first three months of 2017, respectively, from the same period in 2016.
Guidance for Q1 Tweaked
The carrier expects first-quarter 2017 total revenue per available seat mile (TRASM) year-over-year growth of 2–4%, up from the prior 1.5–3.5%. It expects pre-tax margin, excluding special items, in the range of 4–6%, an increase from the original 3–5%. The raised guidance is primarily based on higher yields. First quarter cost per available seat mile (CASM: excluding fuel and special items) is anticipated to increase approximately 8% due to higher labor costs. Average fuel cost per gallon (mainline) is projected in the band of $1.67 to $1.72 per gallon.
Price Performance
Shares of American Airlines gained 3.68% over the last one month, outperforming the Zacks categorized Transportation-Airline industry’s gain of 1.33% over the same period.
The bullish guidance is a further positive for the stock.
Zacks Rank & Key Picks
American AirlinesGroupcurrently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader transportation sector are Gol Linhas Aereas Inteligentes , Aegean Marine Petroleum Network and Deutsche Lufthansa (DLAKY - Free Report) . Gol Linhas and Aegean Marine Petroleum sport a Zacks Rank #1 (Strong Buy), while Deutsche Lufthansa carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Gol Linhas, Aegean Marine Petroleum and Deutsche Lufthansa gained over 141%, 21% and 30%, respectively, on a year-to-date basis.
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American Airlines Group (AAL) Up on Raised Q1 TRASM View
Shares of Fort Worth, TX-based American Airlines Group (AAL - Free Report) rallied on Apr 11 following a guidance revision. The stock closed the last trading session at $43.93, up 3.8% from the previous day’s closing. The upbeat guidance was issued by the company while releasing its March traffic data.
The carrier posted a decline in air traffic in the month of March. Traffic – measured in revenue passenger miles (RPMs) – was 18.8 billion, down 1.2% from the year-ago figure in the same month.
On a year-over-year basis, consolidated capacity (available seat miles/ASMs) fell 0.9% to 23 billion. Load factor or percentage of seats filled by passengers decreased 200 basis points (bps) to 81.5% due to greater reduction in traffic compared with capacity contraction.
In the first three months of 2017, American Airlines recorded a 1.5% fall in RPMs to 51 billion, while ASMs declined 1.1% to 64.3 billion, both on a year-over-year basis. Also, the load factor declined 400 bps year over year to 79.2%. Moreover, total passenger count (Enplanements) fell 0.5% and 1.2% in the month of March and the first three months of 2017, respectively, from the same period in 2016.
Guidance for Q1 Tweaked
The carrier expects first-quarter 2017 total revenue per available seat mile (TRASM) year-over-year growth of 2–4%, up from the prior 1.5–3.5%. It expects pre-tax margin, excluding special items, in the range of 4–6%, an increase from the original 3–5%. The raised guidance is primarily based on higher yields. First quarter cost per available seat mile (CASM: excluding fuel and special items) is anticipated to increase approximately 8% due to higher labor costs. Average fuel cost per gallon (mainline) is projected in the band of $1.67 to $1.72 per gallon.
Price Performance
Shares of American Airlines gained 3.68% over the last one month, outperforming the Zacks categorized Transportation-Airline industry’s gain of 1.33% over the same period.
The bullish guidance is a further positive for the stock.
Zacks Rank & Key Picks
American AirlinesGroupcurrently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader transportation sector are Gol Linhas Aereas Inteligentes , Aegean Marine Petroleum Network and Deutsche Lufthansa (DLAKY - Free Report) . Gol Linhas and Aegean Marine Petroleum sport a Zacks Rank #1 (Strong Buy), while Deutsche Lufthansa carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Gol Linhas, Aegean Marine Petroleum and Deutsche Lufthansa gained over 141%, 21% and 30%, respectively, on a year-to-date basis.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>