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Investing.com - Citi has reiterated its Buy rating on American Airlines (NASDAQ:AAL) stock, maintaining its price target of $18.25. This target aligns with the broader analyst sentiment, with targets ranging from $8 to $20 and seven analysts recently revising their earnings expectations upward, according to InvestingPro data.
The firm noted uncertainty about whether American Airlines’ management has incorporated potential Brazilian tariff impacts on planned second-half aircraft purchases into its guidance.
Citi observed that while American Airlines has mostly beaten earnings expectations over several quarters, "questionable guides" have periodically put pressure on the stock.
The research firm highlighted that American Airlines’ equity market capitalization remains below its 2020/2021 levels, despite the airline now generating positive free cash flow and having "materially lower leverage."
Citi also pointed out that American Airlines’ earnings per share range is "nowhere near as weak as it was at the height of COVID," though the firm indicated it seeks "better visibility on the guide."
In other recent news, American Airlines has been the focus of several analyst updates. Citi reiterated its buy rating on American Airlines, maintaining an $18.25 price target, citing resilient international long-haul and premium demand as positive factors despite challenges in domestic demand. Jefferies analyst Sheila Kahyaoglu adjusted her price target for American Airlines, initially lowering it to $10.50 while maintaining a hold rating, but later raising it to $11.00 after discussions with company executives. Kahyaoglu noted that second-quarter demand remains stable, though the outlook for the latter half of the year is uncertain. American Airlines is on track to recapture $14 billion in indirect sales in 2023, with a full recovery expected by year-end. Additionally, the National Transportation Safety Board will conduct an investigative hearing into a January collision involving an American Airlines regional jet, releasing thousands of pages of records. Meanwhile, French aviation authorities have requested a reduction in flights at Paris airports and others due to an upcoming air traffic controller strike.
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