American Airlines (AAL – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Andrew Didora from Bank of America Securities maintained a Hold rating on the stock and has a $20.00 price target.
Andrew Didora has given his Hold rating due to a combination of factors impacting American Airlines. The recent accident at Washington Reagan airport has introduced some uncertainty into the near-term demand outlook, particularly affecting government travel, which is a small but notable portion of the airline’s revenue. Despite this, the company reports strong bookings into the second quarter, indicating no significant demand issues in the immediate future.
On the supply side, American Airlines is facing longer-term constraints due to supply chain issues and air traffic control restrictions, which could limit capacity growth. Additionally, while the company is making progress in rebuilding its corporate sales efforts, these initiatives will take time to fully materialize. The balance sheet remains a concern, as the airline plans to maintain its COVID-era government debt, which will see increased interest rates. These factors collectively contribute to the Hold rating, reflecting both challenges and potential opportunities for the airline.
Based on the recent corporate insider activity of 40 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AAL in relation to earlier this year.