It was a rough Tuesday for airline stocks, and American Airlines (AAL) was no exception. Shares dropped about 2% as the broader market turned risk-off, with money flowing into defensive sectors while cyclical names like airlines took a hit. The Nasdaq fell 2.28%, the S&P 500 slipped 0.68%, and industrials dropped about 2.5%, adding to the pressure.
But beneath the surface, analysts are still bullish. Susquehanna analyst Christopher Stathoulopoulos raised his price target on American Airlines from $16 to $25 while maintaining a Positive rating. He believes the stock's current valuation appropriately reflects the company's progress in expanding premium offerings and addressing domestic network concerns, while also accounting for near-term macroeconomic, geopolitical, and balance sheet risks.
Technical Picture: Still Flying High
Despite Tuesday's pullback, the technical setup remains constructive. American Airlines stock continues to trade above its 20-day, 50-day, 100-day, and 200-day simple moving averages, suggesting the intermediate-term uptrend is intact. The MACD remains above its signal line, indicating buying momentum is still there even after the dip.
Investors will be watching whether shares can hold support near the $15 level if selling pressure continues. The stock hit a 52-week high of $18.79 in July after forming a bullish "golden cross" in June, when the 50-day moving average crossed above the 200-day moving average.
Earnings on the Horizon
American Airlines is scheduled to report second-quarter results on July 23. Wall Street expects earnings of just $0.04 per share, down sharply from $0.95 a year earlier, on revenue of $16.68 billion, up from $14.40 billion.
The stock carries a consensus Hold rating with an average analyst price target of $19.47. Besides Susquehanna's upgrade, BMO Capital raised its target to $19.50 with a Market Perform rating earlier this month, and TD Cowen increased its forecast to $24 while reiterating a Buy rating.
ETF Exposure
American Airlines is a significant holding in several aviation-focused ETFs, including the Themes Airlines ETF (AIRL) and the U.S. Global Jets ETF (JETS). That means fund inflows and outflows can move the stock, adding another layer of volatility for traders to watch.
At the time of publication Tuesday, American Airlines shares were down 2.03% at $17.39, according to market data.
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