Why AAL Stock Is Tumbling Today

American Airlines (AAL) is sinking 8% today after its first-quarter and full-year guidance disappointed investors.

AAL’s Guidance Misses

The carrier predicted that it would generate an adjusted per-share loss of 20 cents to 40 cents for the current quarter, driven by relatively weak demand and high fuel prices. Analysts on average had predicted that AAL would lose just 1 cent per share in Q1.

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For all of 2025, AAL provided adjusted EPS guidance of $1.70 to $2.70. The midpoint of this range is $2.20, well below analysts’ average outlook of $2.35.

Two Investment Banks Upgraded AAL Earlier This Month

Roughly two weeks ago, investment banks Jefferies and TD Cowen both raised their ratings on AAL to Buy from Hold. Jefferies believed that the airlines’ financial results could significantly beat expectations in 2025. Among the positive catalysts identified by the bank were a higher share of the corporate market and lower capital spending. Jefferies increased its price target on the name to $20 from $12.

TD Cowen predicted that AAL would overcome “transitory…headwinds.” It increased its price target on the name to $25 from $17.

The Recent Price Action of AAL Stock

In the last month, AAL has dropped 1.2%, but it has zoomed 34% higher in the last three months.

While we acknowledge the potential of AAL, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.