American Airlines shares fall the most in 33 weeks on Thursday, 737 MAX grounding to reduce 2019 pretax profit by $400 million

American Airlines Group Inc said yesterday that the Boeing 737 MAX global grounding could reduce its 2019 pretax profit by nearly $400 million.

The air carrier has taken its 24 737 MAX aircraft off its flight schedule until early November, which resulted in approximately 115 cancellations per day.

American Airlines shares closed lower for the fifth time in the past twelve trading sessions on NASDAQ on Thursday. It has also been the steepest daily loss since December 7th 2018. The stock went down 8.44% ($2.92) to $31.67, after touching an intraday low at $31.58, or a price level not seen since June 27th ($31.42).

Shares of American Airlines Group have retreated 1.37% so far in 2019 compared with a 19.82% 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 total operating revenue went up 3% year-on-year to $11.96 billion during the second quarter, supported by strong passenger demand.

Meanwhile, net income attributable to shareholders surged 19% year-on-year to $662 million ($1.49 per share) during the quarter ended on June 30th.

Earnings per share, which exclude special items, were reported at $1.82 during the latest quarter, thus, exceeding a consensus of analyst estimates ($1.80 per share).

The air carrier also revised up its full-year 2019 adjusted earnings forecast to a range of $4.50 to $6.00 per share from a range of $4.00 to $6.00 per share, as expected previously.

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 26.30% upside compared to the closing price of $31.67 on July 25th.

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 5 – as “Hold”. On the other hand, 2 analysts had recommended selling the stock.