American Airlines Soars into 2025 with Upgraded Stock Recommendations
After a tumultuous 2024, American Airlines is poised to take off in 2025, thanks to a significant boost from two prominent investment banks, TD Cowen and Jeffries. The airlines’ stock received a major upgrade, with TD Cowen raising its price target to $25 per share, up from $17, and Jeffries increasing its target to $20 per share, up from $12.
A Fresh Start for American Airlines
The analysts at TD Cowen acknowledged their previous misstep, stating, “We were too early with our upgrade a year ago and then failed to appreciate the transitory nature of their headwinds.” However, they now believe American Airlines has an “enviable franchise” that sets it apart from its competitors. This vote of confidence comes as the airline works to revamp its business-class operations.
Rebuilding Relationships and Rewards
Last summer, American Airlines faced backlash from customers and travel agents when it attempted to bring more revenue in-house. The company has since parted ways with its former Chief Commercial Officer, Vasu Raja, and is now focused on rebuilding relationships with its business customers and travel agents. CEO Robert Isom emphasized the importance of making it easier to do business with American during the company’s recent earnings call.
New Loyalty Program and Pricing Environment
The airline has also secured a new loyalty program credit card deal with Citibank, which is expected to provide a significant revenue boost. Furthermore, the industry’s capacity discipline in 2025 is expected to lead to a better pricing environment, as airlines reduce their supply to meet demand. As Jeffries analysts noted, “Market capacity discipline in 2025 is welcome.”
A Brighter Future Ahead
With its stock currently trading at around $17.70, American Airlines is poised for a strong start to 2025. The company’s renewed focus on its business customers, travel agents, and loyalty program, combined with a more favorable pricing environment, has investors optimistic about its future prospects.
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