We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Here's Why Investors Should Give American Airlines Stock a Miss Now
Read MoreHide Full Article
Key Takeaways
AAL's Q2 2025 operating expenses rose 2.4% YoY to $13.26B, straining profitability.
Earnings estimates revised down; 2025 EPS forecast cut by 21.4% in 60 days.
AAL shares are down 28.4% YTD, while the airline industry gained 6.2%.
American Airlines (AAL - Free Report) is facing significant challenges that are adversely impacting its performance. Economic uncertainty, weak liquidity and escalated operating expenses are major headwinds, straining the company’s prospects and making it an unattractive choice for investors’ portfolios.
Let’s delve deeper.
AAL: Key Risks to Watch
Southward Earnings Estimate Revision: Currently, the Zacks Consensus Estimate for the current-quarter bottom line is pegged at a loss of 24 cents per share, in contrast to earnings of 6 cents 60 days ago. Meanwhile, the Zacks Consensus Estimate for 2025 earnings stands at 44 cents per share, indicating a 21.4% fall over the past 60 days.
Image Source: Zacks Investment Research
The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.
Dim Price Performance: The company’s price trend reveals that its shares have fallen 28.4% in the year-to-date period against the Transportation - Airline industry’s 6.2% rise.
Image Source: Zacks Investment Research
Weak Zacks Rank: AAL currently carries a Zacks Rank #4 (Sell).
Headwinds: American Airlines struggles under mounting pressure as weakening demand, surging costs and tight liquidity drag on performance. Economic uncertainty cuts into domestic leisure travel, one of its biggest revenue streams, while the American Eagle Flight 5342 accident earlier this year adds reputational risk and could further erode passenger confidence if safety concerns linger.
The carrier’s costs continue to rise, with total operating expenses jumping 2.4% year over year in the second quarter of 2025, to $13.3 billion. Liquidity poses an even greater challenge; the company ends the quarter with a current ratio of just 0.58, signaling it lacks enough short-term assets to meet immediate obligations, a critical weakness for a capital-intensive business that depends on steady cash flow to remain operational.
Stocks to Consider
Investors interested in the Zacks Airline industry may consider LATAM Airlines Group (LTM - Free Report) and SkyWest (SKYW - Free Report) .
LTM has an expected earnings growth rate of 45% for the current year. The company has a mixed earnings surprise history. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met in the remaining one, delivering an average beat of 4.04%.
SKYW currently sports a Zacks Rank #1.
SkyWest has an expected earnings growth rate of 28.06% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.92%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Investors Should Give American Airlines Stock a Miss Now
Key Takeaways
American Airlines (AAL - Free Report) is facing significant challenges that are adversely impacting its performance. Economic uncertainty, weak liquidity and escalated operating expenses are major headwinds, straining the company’s prospects and making it an unattractive choice for investors’ portfolios.
Let’s delve deeper.
AAL: Key Risks to Watch
Southward Earnings Estimate Revision: Currently, the Zacks Consensus Estimate for the current-quarter bottom line is pegged at a loss of 24 cents per share, in contrast to earnings of 6 cents 60 days ago. Meanwhile, the Zacks Consensus Estimate for 2025 earnings stands at 44 cents per share, indicating a 21.4% fall over the past 60 days.
Image Source: Zacks Investment Research
The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.
Dim Price Performance: The company’s price trend reveals that its shares have fallen 28.4% in the year-to-date period against the Transportation - Airline industry’s 6.2% rise.
Image Source: Zacks Investment Research
Weak Zacks Rank: AAL currently carries a Zacks Rank #4 (Sell).
Headwinds: American Airlines struggles under mounting pressure as weakening demand, surging costs and tight liquidity drag on performance. Economic uncertainty cuts into domestic leisure travel, one of its biggest revenue streams, while the American Eagle Flight 5342 accident earlier this year adds reputational risk and could further erode passenger confidence if safety concerns linger.
The carrier’s costs continue to rise, with total operating expenses jumping 2.4% year over year in the second quarter of 2025, to $13.3 billion. Liquidity poses an even greater challenge; the company ends the quarter with a current ratio of just 0.58, signaling it lacks enough short-term assets to meet immediate obligations, a critical weakness for a capital-intensive business that depends on steady cash flow to remain operational.
Stocks to Consider
Investors interested in the Zacks Airline industry may consider LATAM Airlines Group (LTM - Free Report) and SkyWest (SKYW - Free Report) .
LTM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
LTM has an expected earnings growth rate of 45% for the current year. The company has a mixed earnings surprise history. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met in the remaining one, delivering an average beat of 4.04%.
SKYW currently sports a Zacks Rank #1.
SkyWest has an expected earnings growth rate of 28.06% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.92%.