Home Entrepreneur Why is American Airlines shares about to take off

Why is American Airlines shares about to take off


Friday’s 5% gain means that American Airlines (NASDAQ: AAL) is one of America’s best performing stocks of the day.

April 26, 2021

4 minutes of reading

This story originally appeared on MarketBeat

Friday’s 5% gain means American Airlines shares (NASDAQ: AAL) was one of the best performance of US stocks of the day. It comes after the previous four rather volatile four days, seeing stocks fall 10% before rebounding closer to the same amount. Consider the company’s Q1 income to be released on Thursday morning, it looks like the big volatility is due to large coin positioning and repositioning accordingly.

The airline’s shares have performed well for most of March, Packing nearly 150% in value for the previous five months. However, the 20% drop over the past four weeks has taken some away from the upside, and investors will be closely watching the stock this week to see how it reacts to it. week number.

Earnings Q1

In terms of issue date, this earnings report is the first to beat the COVID epidemic with free-falling stocks at this time last year. But much of the numbers are still compared to the last quarter of activity before COVID. Unsurprisingly, revenue for the first quarter of 2021 was down 52% from the same period last year and was slightly lower than what analysts had expected. EPS is all in red and it may take a while before we see that change.

However, all that is said, yes many positives to remove from the report. Management expects the second quarter figure to drop only 40% y-o-y in 2019, as booking trends continue to rise and global vaccine rollouts continue to accelerate. American CEO Doug Parker spoke of this optimistic outlook as he said “forward, with growth from the first quarter, we see signs of further recovery in demand. We remain confident that the network improvements, customer-centric improvements and the effective measures we have taken will ensure Americans are in a good position to recover ”, while they continue to reduce costs.

Chairman Robert Isom also left investors with no doubts about their short-term goals as he said “we plan to have all of our remaining planes operational this summer and not. also sits along runways across the country. ” Earlier this month, we had news that they ‘were planning to give all the pilots a chance to fly again by the end of the summer, and are even planning to hire 300 new pilots by the end of the year and add 600 by the end of 2022. They are also adding to 150 new routes this summer, building on the optimism seen with their peers, many of whom have taken similar steps.

For investors willing to take a bit of a risk by buying the stock recovery story at the front of the COVID pandemic, there is sure to be a bullish future here. Even with the ugly beginning and ending numbers, stocks were quickly bought off their lows, suggesting that the worst case scenario has been priced after last month’s plunge.

New upgrade

Raymond James sees fit to upgrade US stocks as reported on Friday, which has certainly helped drive the buying price of stocks on weekends at the highest level of the day. Analyst Savanthi Syth sees an improving profit profile developing in the short term, with the recent bull run providing a good entry point for investors.

Technically, the stock is already Quickly buy at any time they dipped to $ 20 in the past week and are unbreakable below, it’s fair to think they’ll now head north and see how far they can go before the bears step in once. again. Looking at their daily price chart, you can see a route that’s easy enough for them to get up to $ 24, and with a steady stream of positive updates from the airline and travel industry, it wouldn’t be absurd to think they will return to the post-COVID high in the coming weeks. For now, there is too much positive momentum going on and last week’s earnings eliminated a major source of uncertainty.

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