American 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.
Momentum Indicator for AAL turns negative, indicating new downward trend
AAL saw its Momentum Indicator move below the 0 level on October 02, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 80 similar instances where the indicator turned negative. In 62 of the 80 cases, the stock moved further down in the following days. The odds of a decline are at 77%.
Technical Analysis (Indicators)
Bearish Trend Analysis
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 76%.
AAL broke above its upper Bollinger Band on September 25, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for AAL entered a downward trend on September 25, 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.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where AAL's RSI Indicator exited the oversold zone, 31 of 40 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 77%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
The Moving Average Convergence Divergence (MACD) for AAL just turned positive on September 14, 2026. Looking at past instances where AAL's MACD turned positive, the stock continued to rise in 37 of 48 cases over the following month. The odds of a continued upward trend are 77%.
Following a +5.01% 3-day Advance, the price is estimated to grow further. Considering data from situations where AAL advanced for three days, in 218 of 291 cases, the price rose further within the following month. The odds of a continued upward trend are 75%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 4 (best 1 - 100 worst), pointing to outstanding 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 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 Valuation Rating of 48 (best 1 - 100 worst) indicates that the company is fair valued 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 (-1.706) is slightly lower than the industry average of (3.112). P/E Ratio (43.726) is within average values for comparable stocks, (23.433). Projected Growth (PEG Ratio) (0.114) is also within normal values, averaging (2.252). Dividend Yield (0.000) settles around the average of (0.010) among similar stocks. P/S Ratio (0.144) is also within normal values, averaging (0.529).
The Tickeron Price Growth Rating for this company is 57 (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 85 (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 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 73, placing this stock worse than average.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a provider of air transportation services for passengers and cargo
Industry Airlines
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