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American Airlines
None of this is helped by the fact that American Airlines currently carries over $40 billion in debt. Airlines are notoriously flimsy in the pocketbook anyway, which makes them risky stocks at any point in time – the slightest gust in the market tends to send investors into a frenzy.
But between the one-two punch of increasing financial liability and depressed airline traffic, American Airlines is in a position all its own.
In fact, the carrier’s slump is so bad that its CEO recently confirmed the board plans to ask Uncle Sam for another round of funding to keep their jets off the ground. Whether or not they’ll get another loan or tax break is up in the air – especially since projections show that airline traffic is likely to remain grounded until as late as 2023.
Qai’s deep learning algorithms have nothing to do with flying or tax consulting, but we’re very interested in the current state of American Airlines stock. And, as a company that provides investing advice to millions around the globe, we think you should be, too. Our AI (artificial intelligence) scours financial data of more companies than you can shake a jumbo-sized jet at – and we’re ready to share our results.
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American Airlines (AAL)
American Airlines closed up 2.4% on Monday to $13.26 per share, continuing a weeklong trend of minor bumps and swing that yield little in long-term results. The company’s stock has sat stagnant for almost a month now, punctuated by occasional gains, only to fall again once more.
This is clearly evidenced in the stock’s most recent price averages, with the 10-day average showing a 3-cent gain. The 22-day price average shows slightly better prospects – a whole 18 cents’ worth, up from $13.08.
Overall, the stock is still down over 54% for the year, though market interest remains high at over 39.5 million shares traded Monday alone.
American Airlines’ other financial metrics haven’t fared much better this year, though there has been some improvement over recent years’ performances.
For instance, whereas revenue was $42.6 billion in 2017, the last year has seen a three-million dollar increase to $45.8 billion. Additionally, EPS has increased from $2.61 to $3.79 in the time frame.
That’s where the good news stops, though. The company’s operating income has taken a dramatic plunge from $5.1 billion to $3.89 billion since 2017, with much of the loss occurring in the past six months alone. Additionally, while the company had an ROE of 85.3% in 2017, the company’s ROE currently sits at a whopping nil. Zero. Zilch. Nada.
There is one bright spot on the horizon, however. With the company’s financial state swirling down the toilet, the only place left to go is up. As such, American Airlines is predicting 24.3% growth over the next 12 months – not bad for a company still caught below a double bear market down.
So, What’s the Verdict?
Qai is here to help you break through the clutter and nonsense, and one of the easiest ways to do that is to provide a simple report card. For American Airlines, the prospects aren’t so good – in fact, the company appears to be failing, with a C in Technical, D in Momentum Volatility, and F in both Growth and Quality Value.
As a result of the company’s financial status – not to mention their gutsy move to beg even more money off the federal government – Qai has rated American Airlines a Top Short for this week in September.
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