On May 28, American Airlines lowered its expectations for the busy second quarter, the same day that United Airlines reaffirmed its guidance. American Airlines' shares fell 14% the next day, and we see American's immediate trouble as mostly self-inflicted and mostly transitory. We have not altered our $13.10 fair value estimate for no-moat AAL's shares.
American has the youngest fleet among US major airlines, which should limit the growth of fuel and maintenance expenses.
Substantial financial leverage may constrain American's ability to invest aggressively in capacity or return capital to shareholders.
|
Metric
|
AAL
|
AC
|
LUV
|
|---|---|---|---|
Price/Earnings (Normalized) | 4.91 | 4.34 | 18.99 |
Price/Book Value | — | 9.10 | 1.65 |
Price/Sales | 0.15 | 0.30 | 0.67 |
Price/Cash Flow | 3.00 | 1.78 | 9.36 |
|
Metric
|
AAL
|
AC
|
LUV
|
|---|---|---|---|
Quick Ratio | 0.41 | 0.79 | 0.97 |
Current Ratio | 0.58 | 0.85 | 1.09 |
Interest Coverage | 1.05 | 2.90 | 0.74 |
|
Metric
|
AAL
|
AC
|
LUV
|
|---|---|---|---|
Return on Assets (Normalized) | 1.90% | 6.87% | 2.62% |
Return on Equity (Normalized) | — | — | 9.01% |
Return on Invested Capital (Normalized) | 6.45% | 16.32% | 3.46% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|---|
| Delta Air Lines Inc
DAL
| Njjhsvpd | Ncp | $30.3 Bil | |||
| Ryanair Holdings PLC ADR
RYAAY
| — | Jqqgsdv | $19.7 Bil | |||
| Ryanair Holdings PLC
RYAOF
| — | Zfpft | $19.7 Bil | |||
| Southwest Airlines Co
LUV
| Sypjfnpc | Jfqxf | $16.8 Bil | |||
| United Airlines Holdings Inc
UAL
| Cngfgbysq | Rzqht | $15.9 Bil | |||
| Singapore Airlines Ltd
SINGF
| — | Ryl | $15.1 Bil | |||
| Singapore Airlines Ltd ADR
SINGY
| — | Svv | $15.1 Bil | |||
| Air China Ltd ADR
AIRYY
| — | Kkm | $14.1 Bil | |||
| Air China Ltd Class H
AICAF
| — | Ktwd | $14.1 Bil |
:quality(80)/s3.amazonaws.com/arc-authors/morningstar/4c0ebe77-db24-4647-aac9-f4c13027ec2f.jpg)