American Airlines Set to Soar in 2025
After a tumultuous year, American Airlines is poised to take off in 2025, according to leading brokerages Jefferies and TD Cowen. The carrier’s stock has received a significant boost, with shares rising nearly 5% to $17.76 in premarket trading.
Rebuilding and Recovery
In 2024, American Airlines focused on rebuilding its sales strategy and mending relationships with corporate clients. This effort came after a sales and distribution approach, implemented in April 2023, backfired, resulting in a loss of corporate clients and negatively impacting revenue.
A Lesson Learned
In hindsight, TD Cowen’s Tom Fitzgerald acknowledged that the brokerage was too early to upgrade the stock a year ago and failed to appreciate the temporary nature of American Airlines’ challenges. The brokerage has since raised its price target to $25 from $17, citing an expected improvement in domestic pricing and the return of corporate customers.
Regaining Momentum
American Airlines has been regaining its market share and benefiting from an improved price environment. The airline’s decision to raise its fourth-quarter profit forecast last month signals a strong start to the holiday travel season.
A Stronger Future Ahead
With ongoing corporate share recapture, reduced capacity, and capital expenditures, American Airlines is expected to experience a substantial upside in 2025, according to Jefferies analysts. The brokerage has raised the stock’s price target to $20 from $12, welcoming the carrier back into the “Big 3” alongside United Airlines and Delta Air Lines.
Brokerage Sentiment
Currently, 10 brokerages rate American Airlines’ stock as “buy” or higher, with 12 “hold” and one “sell” rating. As the airline continues to recover and rebuild, investors are optimistic about its prospects in the new year.
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