American Airlines Set for 2025 Revival with Stock Upgrades
AVIATION & AIRPORTS

American Airlines Set for 2025 Revival with Stock Upgrades

American Airlines is on track for a strong 2025, with brokerages Jefferies and TD Cowen upgrading the airline’s stock to a "buy" rating. Shares surged nearly 5% in premarket trading, reaching ?1,472 million ($17.76).

After a challenging 2024 marked by the fallout of a controversial sales strategy, the Texas-based carrier has been rebuilding relationships with corporate clients. The airline’s 2023 move to renegotiate contracts with travel agencies and reduce discounts backfired, leading to an exodus of corporate customers and a drop in revenue. This put American behind competitors United Airlines and Delta Air Lines.

Jefferies analysts now predict a rebound as American recaptures market share and benefits from improved domestic pricing. They raised the stock’s price target to Rs 1,659 million ($20) from Rs 995 million ($12). Similarly, TD Cowen increased their target to Rs 2,075 million ($25) from Rs 1,411 million ($17), citing strong corporate client recovery and a positive price environment.

Last month, American Airlines raised its fourth-quarter profit forecast, hinting at a robust holiday season. With reduced capacity and capital expenditures, analysts forecast substantial growth for the airline, reinstating its position among the “Big 3” network carriers.

Out of 23 brokerages, 10 rate the stock as a "buy" or higher, while 12 suggest "hold," and one recommends "sell."

American Airlines is on track for a strong 2025, with brokerages Jefferies and TD Cowen upgrading the airline’s stock to a buy rating. Shares surged nearly 5% in premarket trading, reaching ?1,472 million ($17.76). After a challenging 2024 marked by the fallout of a controversial sales strategy, the Texas-based carrier has been rebuilding relationships with corporate clients. The airline’s 2023 move to renegotiate contracts with travel agencies and reduce discounts backfired, leading to an exodus of corporate customers and a drop in revenue. This put American behind competitors United Airlines and Delta Air Lines. Jefferies analysts now predict a rebound as American recaptures market share and benefits from improved domestic pricing. They raised the stock’s price target to Rs 1,659 million ($20) from Rs 995 million ($12). Similarly, TD Cowen increased their target to Rs 2,075 million ($25) from Rs 1,411 million ($17), citing strong corporate client recovery and a positive price environment. Last month, American Airlines raised its fourth-quarter profit forecast, hinting at a robust holiday season. With reduced capacity and capital expenditures, analysts forecast substantial growth for the airline, reinstating its position among the “Big 3” network carriers. Out of 23 brokerages, 10 rate the stock as a buy or higher, while 12 suggest hold, and one recommends sell.

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