Analysts’ consensus on American Airlines

Over time, analysts’ interest in American Airlines (AAL) has improved gradually. Currently, 18 analysts are actively tracking American Airlines stock. Of the analysts, 56% recommend a “buy,” 39% recommend a “hold,” and 5% recommend a “sell.”

American Airlines: Analysts’ Views before 4Q17

Analysts’ consensus for American Airlines indicates a target price of $63.40, which implies a return potential of 9.0% over the closing price of $57.98 as of January 17, 2018. In the past three months, the consensus target price has moved up from $56.40 to the current target price. It indicates that analysts are bullish on the stock.

More ‘buys’ and ‘holds’

American Airlines’ total revenue per available seat mile is expected to be 5%–6% higher than 4Q16. The earlier guidance was between 2.5% and 4.5%. As a result, American Airlines is expected to clock higher revenue. Its continued aggressive stock repurchases are expected to add value to the remaining shareholders. As a result, most of the analysts have recommended a “buy” or “hold” for the stock.

Individual broker recommendations and target prices

  • Raymond James recommended a target price of $64 for American Airlines, which implies a return potential of 10.40% over the closing price of $57.98 as of January 17, 2018.
  • Citigroup raised its target price for American Airlines to $61, which implies a return potential of 5.20% over the closing price as of January 17, 2018.
  • Bank of America Merrill Lynch recommended a target price of $70 for American Airlines. It implies a return potential of 20.70% from the closing price as of January 17, 2018.

Investors can invest in American Airlines indirectly by investing in the iShares Transportation Average ETF (IYT). IYT has invested 3.40% of its portfolio in American Airlines. It also provides exposure to FedEx (FDX), Union Pacific (UNP), and Southwest Airlines (LUV) with weights of 14.80%, 7.90%, and 3.90%, respectively, as of January  17, 2018.

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