American Airlines Group Inc (AAL) said yesterday that it expected the grounding of Boeings 737 MAX aircraft to reduce earnings by almost $185 million in the second quarter, since thousands of flights had to be canceled.
American Airlines shares closed higher for the seventh time in the past eleven trading sessions on NASDAQ on Wednesday. It has also been the sharpest daily surge since June 27th. The stock went up 1.79% ($0.58) to $32.94, after touching an intraday high at $33.69, or a price level not seen since June 20th ($33.81).
Shares of American Airlines Group have risen 2.58% so far in 2019 compared with a 19.40% gain for the benchmark index, S&P 500 (SPX).
In 2018, American Airlines’ stock went down 38.29%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.
American Airlines said that nearly 7 800 flights had been canceled during the second quarter. The air carrier operates the second-largest fleet of MAX jets in the United States with 24 units.
Meanwhile, the company said it now projected a 3% to 4% surge in its second-quarter unit revenue, a key metric that compares sales to flight capacity. American Airlines had previously expected a 1% to 3% increase in unit revenue.
Analyst stock price forecast and recommendation
According to CNN Money, the 19 analysts, offering 12-month forecasts regarding American Airlines Group’s stock price, have a median target of $40.00, with a high estimate of $55.00 and a low estimate of $26.00. The median estimate represents a 21.43% upside compared to the closing price of $32.94 on July 10th.
The same media also reported that at least 12 out of 22 surveyed investment analysts had rated American Airlines Group’s stock as “Buy”, while 6 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.