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American Airlines (AAL) Surges 10%: Is This an Indication of Further Gains?
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American Airlines (AAL - Free Report) shares rallied 10% in the last trading session to close at $14.77. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.8% gain over the past four weeks.
The uptick was owing to the management's commentary that it expects to report pre-tax profit in second-quarter 2022 (detailed results will be out on Jul 21) for the first time since the inception of the pandemic. Buoyant air-travel demand led to the bullish forecast. AAL expects to earn pre-tax income of $585 million during the quarter. Pre-tax margin (excluding net special items) is expected to be 5%. AAL expects its second quarter total revenue to be up approximately 12% versus the second quarter of 2019. Total revenue per available seat miles (TRASM) is expected to be up 22.5% compared with second-quarter 2019 actuals (earlier guidance was for an increase in the 20-22% range). AAL now expects its second quarter cost per available seat miles in the June quarter to be up approximately 12% versus second-quarter 2019 (earlier guidance was for an increase in the 10-11% range). Average fuel cost per gallon is likely to be in the $4-4.05 range. Fuel gallons consumed is likely to be $997 million.
This world's largest airline is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +145.6%. Revenues are expected to be $13.34 billion, up 78.4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For American Airlines, the consensus EPS estimate for the quarter has been revised 48.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AAL going forward to see if this recent jump can turn into more strength down the road.
American Airlines is part of the Zacks Transportation - Airline industry. Copa Holdings (CPA - Free Report) , another stock in the same industry, closed the last trading session 4.5% higher at $63.31. CPA has returned 3.5% in the past month.
For Copa Holdings, the consensus EPS estimate for the upcoming report has changed -15.9% over the past month to $0.29. This represents a change of +176.3% from what the company reported a year ago. Copa Holdings currently has a Zacks Rank of #4 (Sell).
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American Airlines (AAL) Surges 10%: Is This an Indication of Further Gains?
American Airlines (AAL - Free Report) shares rallied 10% in the last trading session to close at $14.77. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.8% gain over the past four weeks.
The uptick was owing to the management's commentary that it expects to report pre-tax profit in second-quarter 2022 (detailed results will be out on Jul 21) for the first time since the inception of the pandemic. Buoyant air-travel demand led to the bullish forecast. AAL expects to earn pre-tax income of $585 million during the quarter. Pre-tax margin (excluding net special items) is expected to be 5%. AAL expects its second quarter total revenue to be up approximately 12% versus the second quarter of 2019. Total revenue per available seat miles (TRASM) is expected to be up 22.5% compared with second-quarter 2019 actuals (earlier guidance was for an increase in the 20-22% range). AAL now expects its second quarter cost per available seat miles in the June quarter to be up approximately 12% versus second-quarter 2019 (earlier guidance was for an increase in the 10-11% range). Average fuel cost per gallon is likely to be in the $4-4.05 range. Fuel gallons consumed is likely to be $997 million.
This world's largest airline is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +145.6%. Revenues are expected to be $13.34 billion, up 78.4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For American Airlines, the consensus EPS estimate for the quarter has been revised 48.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AAL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
American Airlines is part of the Zacks Transportation - Airline industry. Copa Holdings (CPA - Free Report) , another stock in the same industry, closed the last trading session 4.5% higher at $63.31. CPA has returned 3.5% in the past month.
For Copa Holdings, the consensus EPS estimate for the upcoming report has changed -15.9% over the past month to $0.29. This represents a change of +176.3% from what the company reported a year ago. Copa Holdings currently has a Zacks Rank of #4 (Sell).