GET DAILY SIGNALSAmerican Airlines Earnings Were Terrible, But It's Stock Soared. Here's Why
American Airlines reported earnings last week, and to no one's surprise, it lost a ton of money -- $2.2 billion for the quarter, to be exact. This marked a negative earnings-per-share (EPS) of -$3.86 for the quarter, losses not unlike those being felt across the airline industry.
But the stock soared on the news. There may be two reasons for this:
- Forecasts for American's earnings were to lose -$4.11 a share, which means the company handily beat earnings expectations.
- Short interest in American Airlines was high, which gave the company's shares a GameStop-like opportunity to squeeze short sellers. We may have seen a bit of that last week with AAL's big price jump.
Shorting American Airlines -- much like the shorts against GameStop -- were arguably justified. The company sports the lowest profit margins among the big U.S. carriers, and its innovation in the realm of technology is lacking. What's more, AAL's debt load is amongst the biggest in the industry, meaning that even in a post-pandemic economy it has its work cut out for it.
Airlines in general are poised to have a strong second half of 2021, once the country gets closer to mass immunization and people will safe traveling again. Big revenues are expected -- the question is, which airlines are best positioned to capture this resurgent growth? Below, Tickeron's Artificial Intelligence analyzes the entire industry, giving investors trading insights for what lies ahead.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AAL in upward trend: price may jump up because it broke its lower Bollinger Band on October 14, 2026
AAL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 32 of 42 cases where AAL's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 76%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where AAL's RSI Oscillator exited the oversold zone, 27 of 40 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 68%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 43 of 59 cases where AAL's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 73%.
The Momentum Indicator moved above the 0 level on October 27, 2026. You may want to consider a long position or call options on AAL as a result. In 60 of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 75%.
The Moving Average Convergence Divergence (MACD) for AAL just turned positive on October 22, 2026. Looking at past instances where AAL's MACD turned positive, the stock continued to rise in 34 of 47 cases over the following month. The odds of a continued upward trend are 72%.
Following a +4.13% 3-day Advance, the price is estimated to grow further. Considering data from situations where AAL advanced for three days, in 217 of 290 cases, the price rose further within the following month. The odds of a continued upward trend are 75%.
Bearish Trend Analysis
The 50-day moving average for AAL moved below the 200-day moving average on October 12, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AAL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 77%.
The Aroon Indicator for AAL entered a downward trend on October 27, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 5 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: AAL's P/B Ratio (-2.102) is slightly lower than the industry average of (1.833). AAL has a moderately low P/E Ratio (-25.735) as compared to the industry average of (5.672). Projected Growth (PEG Ratio) (0.114) is also within normal values, averaging (2.252). Dividend Yield (0.032) settles around the average of (0.028) among similar stocks. P/S Ratio (0.144) is also within normal values, averaging (0.529).
The Tickeron SMR rating for this company is 16 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 62 (best 1 - 100 worst), indicating fairly steady price growth. AAL’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 99 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AAL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock worse than average.
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Fundamental Analysis Ratings
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General Information
a provider of air transportation services for passengers and cargo
Industry Airlines
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