American Airlines Groups (AAL) fourth-quarter earnings, reported on Thursday, exceeded Wall Street estimates, supported by higher fares and sound demand for air travel. The airline also projects a stronger growth in its full-year EPS compared to a consensus of estimates.
American Airlines shares closed higher for the fifth time in the past ten trading sessions on NASDAQ on Thursday. It has also been the sharpest daily surge since January 4th. The stock went up 6.35% ($2.01) to $33.66, after touching an intraday high at $34.31, or a price level not seen since December 13th ($34.69).
Shares of American Airlines Group have risen 4.83% so far in 2019 compared with a 5.40% gain for the benchmark index, S&P 500 (SPX).
In 2018, American Airlines’ stock dropped 38.29%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.
The companys total operating revenue went up 3.1% year-on-year to $10.94 billion during the quarter ended on December 31st.
However, the largest US airline by passenger traffic reported an almost 20% increase in fuel expenses during the latest quarter from a year ago.
Excluding special items, American Airlines’ net income was reported to have surged 8.3% to $481 million (or $1.04 per share) during the quarter ended on December 31st from a year ago. In comparison, analysts on average had expected adjusted earnings of $1.01 per share.
American Airlines said it now expected between zero and 2% growth in its first-quarter unit revenue, a key metric which reflects the relation between sales and flight capacity.
Additionally, it forecasts growth of between 21% and 65% in its full-year earnings per share compared with a 30% EPS growth expected by analysts.
The company also expects to generate $1 billion in additional revenue during the present year as a result of network optimization, Premium Economy product expansion and new gates added at its hubs in Charlotte and Dallas-Fort Worth.
Last but not least, the air carrier said it forecast over $300 million in cost savings during the current year.
According to CNN Money, the 19 analysts, offering 12-month forecasts regarding American Airlines Group’s stock price, have a median target of $46.00, with a high estimate of $60.00 and a low estimate of $37.00. The median estimate represents a 36.66% upside compared to the closing price of $33.66 on January 24th.
The same media also reported that 12 out of 21 surveyed investment analysts had rated American Airlines Group’s stock as “Buy”, while 5 – as “Hold”.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for American Airlines Group (AAL) are presented as follows:
Central Pivot Point – $32.90
R1 – $35.11
R2 – $36.24
R3 – $38.45
R4 – $40.65
S1 – $31.77
S2 – $29.56
S3 – $28.43
S4 – $27.29
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