10 Best Airline Stocks to Buy For 2024

3. American Airlines Group Inc (NASDAQ:AAL)

Number of Hedge Fund Investors: 43

American Airlines Group Inc (NASDAQ:AAL) shares are taking a hit amid guidance cuts, Boeing-related headwinds and a limited capacity heading into the summer travel season. Last month, American Airlines Group Inc (NASDAQ:AAL) lowered its adjusted profit guidance for the second quarter. American Airlines Group Inc (NASDAQ:AAL) expects the figure to be in the range of  $1.00-$1.15, lower than its prior guidance of $1.15-$1.45. Wall Street was expecting American Airlines Group Inc (NASDAQ:AAL) to report Q2 adjusted profit at $1.27. Q2 net operating margin in the period is expected to be between 8.5%-10.5%, compared to its earlier outlook of ~9.5%-11.5%. In the first quarter, American Airlines Group Inc (NASDAQ:AAL) operating expenses jumped 6.9% on a YoY basis despite a decline in fuel prices. This was due to a whopping $586 million increase in salaries, wages, and benefits. Despite this, American Airlines Group Inc (NASDAQ:AAL) bulls believe the stock would rebound as the company’s moat lies in its sheer size and dominance, with nearly 7,000 daily flights across 350 destinations. American Airlines Group Inc (NASDAQ:AAL) cut its debt in the first quarter by $950 million to $41.7 billion.

American Airlines Group Inc (NASDAQ:AAL) is trading at 4.07X its 2025 expected earnings, lower than the sector median of 18. The stock’s EV / EBITDA (FWD) is 5.82, lower than the industry average of 11. Wall Street analysts have a one-year average price target of 15.96 on the stock, which represents a 38% upside potential from the current levels.