American Airlines Group Inc. (AAL) rose 1.9% to close at $19.89 on Thursday after the airline holding company posted a narrower-than-expected loss for the third quarter of 2021. Additionally, revenues beat analysts’ expectations.
The company incurred an adjusted loss of $0.99 per share against the Street’s loss estimate of $1.20 per share. AAL had posted a loss of $5.54 per share in the same quarter last year.
Total revenue generated in the quarter amounted to $8.97 billion, topping expectations of $8.85 billion. Markedly, revenues more than doubled from the prior-year quarter on the back of elevated passenger and cargo revenues.
Segment-wise, on a year-over-year basis, passenger revenues more than tripled to $7.96 billion, while cargo revenues surged 59.9% to $332 million.
American Airlines ended the third quarter with about $18 billion of total available liquidity. The air carrier announced that it was aiming to reduce its debt by $15 billion by the end of 2025.
The CEO of American Airlines, Doug Parker, commented, “While the rise of the COVID-19 delta variant delayed some of our revenue recovery, it has not stopped our progress. We are incredibly proud of the team’s hard work to operate a great airline, and with the network, cost and fleet simplification actions we have taken, we’re confident American is well-positioned as the recovery takes hold.” (See American Airlines stock charts on TipRanks)
Looking ahead, based on current trends, the company expects capacity to be down 11% to 13% year-over-year in the fourth quarter. Additionally, fourth-quarter total revenue is forecast to be down about 20% from the prior-year quarter.
Markedly, American Airlines continues to expect strong demand during peak travel periods in the fourth quarter, with peak day departures exceeding 6,000.
Recently, Jefferies analyst Sheila Kahyaoglu maintained a Hold rating on American Airlines with a price target of $24 (20.7% upside potential).
Kahyaoglu expects the company to record earnings of $0.03 per share for the fourth quarter of 2021.
Overall, the stock has a Hold consensus rating based on 3 Buys, 5 Holds and 4 Sells. The average American Airlines price target of $20.50 implies 3.1% upside potential to current levels. Shares have increased 51.3% over the past year.
According to SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, globally, the American Airlines website recorded a 22.47% monthly growth, year-over-year, in visits in September, while year-to-date website growth, compared to year-to-date website growth in the previous year, came in at 22.86%. (See American Airlines’ website traffic on TipRanks)
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