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American Airlines Group Inc AAL

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

American Airlines Outperformed Peers on Revenue in the Fourth Quarter, Raising FVE to $14

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

No-moat-rated American Airlines reported a difficult quarter as the pandemic continues to ravage travel demand, though we expect that a COVID-19 vaccine rollout this summer should dramatically improve operating results. We’re increasing our fair value estimate to $14 per share. The main sources of fair value increase were an additional $3.1 billion of payroll support and guidance that future aircraft purchases would be funded by sale-leasebacks, which more than offset a slightly lower midcycle operating margin. We believe potential investors should accept the possibilities of both substantial volatility and permanent value destruction, as we feel the airline has a highly uncertain future.

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Company Profile

Business Description

American Airlines is the world’s largest airline by scheduled revenue passenger miles. The firm’s major hubs are Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. After completing a major fleet renewal, the company has the youngest fleet of U.S. legacy carriers.

Contact
1 Skyview Drive
Fort Worth, TX, 76155
T +1 817 963-1234
Sector Industrials
Industry Airlines
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 102,700

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