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American Airlines (AAL) Beats Stock Market Upswing: What Investors Need to Know

American Airlines (AAL) ended the recent trading session at $11.44, demonstrating a +1.42% swing from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily gain of 0.77%. On the other hand, the Dow registered a gain of 0.49%, and the technology-centric Nasdaq increased by 0.95%.

Shares of the world's largest airline have depreciated by 23.42% over the course of the past month, underperforming the Transportation sector's loss of 5.79% and the S&P 500's gain of 3.71%.

The upcoming earnings release of American Airlines will be of great interest to investors. The company is forecasted to report an EPS of $1.11, showcasing a 42.19% downward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $14.55 billion, indicating a 3.5% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.14 per share and revenue of $55.21 billion. These totals would mark changes of -19.25% and +4.59%, respectively, from last year.

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Investors should also take note of any recent adjustments to analyst estimates for American Airlines. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 16.03% lower within the past month. Currently, American Airlines is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, American Airlines is at present trading with a Forward P/E ratio of 5.28. This signifies a discount in comparison to the average Forward P/E of 8.82 for its industry.

Investors should also note that AAL has a PEG ratio of 0.19 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Transportation - Airline was holding an average PEG ratio of 0.8 at yesterday's closing price.

The Transportation - Airline industry is part of the Transportation sector. This industry, currently bearing a Zacks Industry Rank of 155, finds itself in the bottom 39% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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American Airlines Group Inc. (AAL) : Free Stock Analysis Report

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Zacks Investment Research