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Investing.com - Goldman Sachs has reiterated its Sell rating and $10.00 price target on American Airlines (NASDAQ:AAL) stock, currently trading at $12.77, despite the carrier reporting better-than-expected quarterly results. According to InvestingPro data, seven analysts have recently revised their earnings expectations downward for the upcoming period.
American Airlines reported a third-quarter earnings beat and raised its full-year 2025 earnings per share guidance to a range of $0.65 to $0.95, up from its previous midpoint of $0.30. Following the announcement, AAL shares closed approximately 5.5% higher, outperforming Goldman’s coverage universe which was down about 2.5%. The airline, with a market capitalization of $8.43 billion and trailing P/E ratio of 13.4, has generated $54.25 billion in revenue over the last twelve months.
Goldman Sachs attributes the positive stock reaction primarily to American’s fourth-quarter EPS outlook of $0.60 at the midpoint, which significantly exceeded the FactSet consensus of $0.30 and Goldman’s estimate of $0.33 prior to the announcement.
The airline’s fourth-quarter unit revenue guidance of flat year-over-year performance surpassed consensus expectations of a 1.4% decline. American Airlines noted that its transatlantic routes should see significant sequential improvement in the fourth quarter, with Pacific network performance also expected to improve materially.
Based on the third-quarter beat and improved fourth-quarter revenue trends, Goldman Sachs has raised its fiscal year 2025 EPS estimate for American Airlines to $0.80 from $0.35 previously, while maintaining its fiscal years 2026 and 2027 EPS estimates at $1.85 and $2.30 respectively. InvestingPro analysis shows the stock currently trades below its Fair Value, with a strong free cash flow yield of 18%. Discover more insights and 6 additional ProTips with an InvestingPro subscription, including detailed analysis of AAL’s financial health score of 2.8 (GOOD).
In other recent news, American Airlines reported its financial results for the third quarter of 2025, showing a narrower-than-expected loss. The company posted an earnings per share (EPS) of -$0.17, surpassing analysts’ forecasts of -$0.28, which represents a surprise of 39.29%. Additionally, American Airlines achieved record third-quarter revenue, amounting to $13.69 billion, slightly exceeding the anticipated $13.63 billion. These results highlight the airline’s ability to generate higher-than-expected revenue despite challenging market conditions. There were no recent mergers or acquisitions reported for American Airlines. Analyst firms have not recently issued any upgrades or downgrades for the company. These developments provide investors with the latest insights into American Airlines’ financial performance.
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