Jefferies Raises Price Target#
Jefferies has increased its price target for American Airlines Group Inc. (NASDAQ:AAL) from $12 to $13, while maintaining a Hold rating on the stock. Currently, shares are trading at $12.10, which is below the estimated Fair Value of $14.05, indicating that the stock may be undervalued.
Revenue Growth and Capacity Expansion#
The firm noted that American Airlines has demonstrated significant revenue progress, reporting a 7.6% growth in unit revenue during the first quarter. The airline anticipates a further increase in unit revenue of 9.5% to 10.5% for the second quarter. Additionally, American Airlines plans to expand its capacity by nearly 4% this year, which is about double the average market rate. The company has also postponed $300 million in capital expenditures originally scheduled for 2026.
Earnings Estimates and Analyst Insights#
Jefferies has adjusted its earnings per share estimate to $0.10, which falls within the company’s guidance range of negative $0.40 to positive $1.10. Although 10 analysts have lowered their earnings forecasts for the upcoming period, they still expect American Airlines to remain profitable this year. The airline has communicated similar expectations regarding fuel costs for the second half of the year, suggesting a need for cautious capacity growth in the current economic climate.
Recent Performance and Analyst Ratings#
In its recent earnings report for the first quarter of 2026, American Airlines revealed a loss per share of $0.40, which was better than the anticipated loss of $0.47. The airline's revenue for the quarter reached $13.91 billion, slightly exceeding expectations. Despite facing challenges like high fuel costs and weather disruptions, American Airlines improved its pre-tax margins by about 2 percentage points year-over-year. Other analysts, including BMO Capital and Raymond James, have also adjusted their price targets and ratings for American Airlines, reflecting ongoing evaluations of the airline's financial health and future prospects.