American Airlines Group Inc. (AAL) — Overvalued With Unconvincing Growth Indicators
American Airlines shares moved -31.6% over the last 52 weeks, with a high of $21.42 and a low of $11.65. During this time, the stock lagged the S&P 500 index by -25.0%. As of April 2023, the company's 50-day average price is $15.34. American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The mid-cap Consumer Discretionary company has 129,700 full time employees and is based in Fort Worth, TX. American Airlines has not offered any dividends in the last year.
Weak Revenue Growth With Decreasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue | $45,768,000 | $17,337,000 | $29,882,000 | $48,971,000 |
| Gross Margins | 22.7% | -43.8% | 0.1% | 18.4% |
| Operating Margins | 8.1% | -63.9% | -17.0% | 3.7% |
| Net Income | $1,686,000 | -$8,885,000 | -$1,993,000 | $127,000 |
| Net Margins | 3.68% | -51.25% | -6.67% | 0.26% |
| Earnings Per Share | $3.79 | -$18.36 | -$3.09 | $0.17 |
| Diluted Shares | 444,269 | 483,888 | 644,015 | 652,817 |
| Free Cash Flow | -$453,000 | -$8,501,000 | $496,000 | -$373,000 |
| Capital Expenditures | -$4,268,000 | -$1,958,000 | -$208,000 | -$2,546,000 |
| Net Current Assets | -$51,907,000 | -$57,780,000 | -$56,446,000 | -$55,246,000 |
| Current Ratio | 0.45 | 0.67 | 0.91 | 0.71 |
| Long Term Debt | $21,454,000 | $29,796,000 | $35,571,000 | $32,389,000 |
| Net Debt / EBITDA | 7.17 | -3.16 | -50.52 | 16.4 |
American Airlines Has Elevated P/B and P/E Ratios:
Compared to the Consumer Discretionary sector's average of 22.33, American Airlines has a trailing twelve month P/E ratio of 90.2 and, according to its EPS guidance of $3.08, an expected P/E ratio of 5.0. American Airlines's PEG ratio is -22.21 based on its -4.1% compound average growth rate of historical and projected earnings per share. This indicates that the company's shares are overvalued.
American Airlines Has an Average Rating of Hold:
13 analysts are following American Airlines and have set target prices ranging from $10.0 to $26.0 per share. On average, they have given the company a rating of hold. At the current price of $15.34, AAL is trading -9.7% away from its average analyst target price of $16.98 per share, implying an analyst consensus of strong upside potential for the stock. The company has an above average percentage of its shares sold short since 10.9% of the company's shares are tied to short positions. Institutions own 55.3% of American Airlines's shares, while the insider ownership rate stands at 1.0%. which is a small amount of insider investors. The company's biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth $944,835,378.
