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American Airlines Group (NASDAQ:AAL) shares are experiencing a dramatic selloff in premarket trading, plunging 6.31% to $11.88 as of 7:56 AM EDT following the release of disappointing third-quarter guidance that significantly missed analyst expectations.
Despite reporting better-than-expected second-quarter earnings of $0.95 per share versus the $0.78 consensus estimate and achieving record quarterly revenue of $14.4 billion, investors are focusing on the airline’s cautious outlook for the remainder of 2025.
The stock’s premarket decline represents a sharp reversal from yesterday’s modest 1.44% gain that closed at $12.68.
American Airlines Guidance Disappoints Wall Street
The primary catalyst behind AAL’s premarket decline stems from management’s sobering third-quarter outlook, which calls for an adjusted loss of $0.10 to $0.60 per share compared to analyst expectations of a $0.03 profit.
This dramatic miss in forward guidance overshadowed the company’s strong second-quarter performance, where it delivered adjusted earnings of $0.95 per share, well above the $0.78 consensus estimate. The guidance shortfall reflects ongoing challenges in the domestic travel market and broader industry headwinds that continue to pressure airline profitability.
American Airlines also revised its full-year 2025 earnings forecast to a range of negative $0.20 to positive $0.80 per share, with a midpoint of just $0.30. This represents a significant reduction from previous analyst expectations of $0.72 per share for the full year.
The company cited evolving demand trends and fuel price pressures as key factors behind the conservative outlook, while noting that the top end of the range remains achievable if domestic market conditions strengthen. However, management warned that macroeconomic weaknesses could push results toward the bottom end of the guidance range.
AAL Stock Plunges in Premarket Trading
As of premarket trading at 7:56 AM EDT, American Airlines shares were down $0.80 or 6.31% to $11.88, erasing yesterday’s modest gains and threatening to push the stock toward its 52-week low range of $8.50 to $19.10.
The company maintains a market capitalization of $8.36 billion with a trailing P/E ratio of 12.68, though these metrics reflect pre-guidance market conditions. With a beta of 1.36, AAL shares typically exhibit higher volatility than the broader market, making dramatic premarket moves like today’s decline relatively common for the stock.
The airline’s financial position shows both strengths and concerns, with $12 billion in total available liquidity providing a solid cushion but also carrying $38 billion in total debt. American’s year-to-date performance has been particularly challenging, down 27.25% compared to the S&P 500’s 8.11% gain, though the stock has shown resilience over longer periods with a 20.99% one-year return.
Analyst price targets range from $8.00 to $20.00 with an average of $13.70, suggesting the current premarket price of $11.88 sits below most professional forecasts, though today’s guidance revision will likely prompt analysts to reassess their targets.
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