American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo. It operates a mainline fleet of 965 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1926 and is headquartered in Fort Worth, Texas.

American Airlines Group, Inc.

American Airlines Group (NASDAQ: AAL), an airline company, closed at $13.25, up $0.12 (0.91%). Trading volume reached 66.47 million shares versus a 3-month average of 62.1 million. The stock remains within its 52-week range of $8.50 to $19.10.
Broader equities advanced. The S&P 500 (SNPINDEX: ^GSPC) finished at 6,501.86, up 20.46 points (0.32%), while the Nasdaq Composite (NASDAQINDEX: ^IXIC) ended at 21,705.16, gaining 115.02 points (0.53%).
Airline peers outperformed. Delta Air Lines Inc (NYSE: DAL) closed at $61.97, up $0.71 (1.16%). Alaska Air Group Inc (NYSE: ALK) ended at $63.18, rising $1.35 (2.17%).
Today's move came on the heels of a recent downgrade by Raymond James Financial (NYSE: RJF) to "Market Perform" from "Outperform." The firm cited valuation, reiterated a $14 price target, and highlighted a relatively stronger view of Alaska Air.
American Airlines is rolling out its most extensive winter schedule to Mexico, expanding flights to resorts such as Cancún and Los Cabos—a strategy aimed at boosting international traffic. Meanwhile, the broader sector awaits a forthcoming ICAO decision on raising the pilot retirement age from 65 to 67, a proposal backed by IATA to address pilot shortages—though it faces union resistance.
Investors will be watching traffic trends, international route execution, and next quarter’s earnings for fresh momentum.
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Daily Stock News has no position in any of the stocks mentioned. This article was generated with GPT-5, OpenAI's large-scale language generation model and has been reviewed by The Motley Fool's AI quality control systems. The Motley Fool recommends Alaska Air Group and Delta Air Lines. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stock Market Today: American Airlines Rises Despite Raymond James Downgrade

American Airlines AAL has struggled with respect to a key metric, operating margin, which indicates how efficiently a company manages its operating costs, such as labor and other expenses related to production and sales. Operating profit is the amount of profit a company generates from its primary business activities.
American Airlines reported an operating margin (on an adjusted basis) of 7.6% in 2023 and 6% in 2024. Even though operating margin improved to 8.2% in the second quarter of 2025, from a negative value in the March quarter, management expects the key metric to remain subdued in the third quarter due to subdued revenues and high costs. AAL expects its third-quarter adjusted operating margin to be in the range of negative 1% to positive 2%. Our estimate is currently pegged at 0.9%.
Total revenues are likely to be either down 2% or increase 1% from year-ago levels. Tariff-related uncertainty is likely to hurt passenger volumes. Cost per available seat miles (adjusted) in the September quarter is expected to increase in the 2.5-4.5% range from third-quarter 2024 actuals.
We expect operating costs (adjusted) to increase more than 3% in 2025 from 2024 levels. Labor costs are very high and are expected to be so going forward. The deal inked with pilots is leading to the uptick in labor costs. Since trade unionism is quite robust in this industry, it is hard to keep a check on wage increases. Salaries, wages and benefits have increased 9.9% in 2024 and are expected to increase more than 8% in 2025.
How Do AAL’s Margins Compare With Some Other Airlines?
Delta Air Lines DAL reported an operating margin (on an adjusted basis) of 13.2% in the second quarter of 2025, lower than the year-ago figure of 14.7%. The U.S. airline expects adjusted operating margins in the 9-11% band in the third quarter of 2025. Given the economic uncertainty, DAL is focusing on reducing planned capacity growth apart from actively managing costs and capital expenditures to drive margins this year.
Copa Holdings CPA has been able to sustain operating margins of more than 20%, making it one of the most profitable airlines globally. For example, the carrier reported an operating margin (on an adjusted basis) of 23.5% in 2023 and 21.9% in 2024. Management expects the carrier to end 2025 with an adjusted operating margin in the 21-23% range. Our expectation of 22.5% is at the higher end of the company’s guided range.
AAL’s Price Performance, Valuation and Estimates
Shares of AAL have lost 8.4% in the past six months, underperforming its industry’s 13.1% uptick in the same timeframe.
Image Source: Zacks Investment Research
From a valuation perspective, AAL appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.15, lower than the industry’s 0.69.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AAL’s third-quarter 2025, fourth-quarter 2025 and full-year 2025 EPS has moved up in the past 60 days.
Image Source: Zacks Investment Research
AAL's Zacks Rank
AAL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will American Airlines' Operating Margin Remain Under Pressure?

The S&P 500 Index ($SPX) (SPY) on Thursday closed down by -0.40%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down by -0.34%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down by -0.46%. September E-mini S&P futures (ESU25) fell -0.40%, and September E-mini Nasdaq futures (NQU25) fell -0.45%.
Stock indexes settled lower on Thursday, with the Dow Jones Industrials falling to a 1-week low. Concerns about consumer spending weighed on stocks after Walmart reported weaker-than-expected Q2 EPS. Also, higher bond yields undercut stocks, with the 10-year T-note yield climbing +4 bp to 4.33% on hawkish Fed comments and stronger-than-expected manufacturing and existing home sales reports.
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Thursday’s weekly US jobless claims report showed a weaker labor market. US weekly initial unemployment claims rose by +11,000 to a 2-month high of 235,000, showing a weaker labor market than expectations of an increase to 225,000. Weekly continuing claims rose +30,000 to a 3.75-year high of 1.972 million, higher than expectations of 1.960 million, showing people out of work are finding it harder to land a new job.
The US Aug Philadelphia Fed business outlook survey fell -16.2 to -0.3, weaker than expectations of 6.5.
The US Aug S&P manufacturing PMI unexpectedly rose +4.5 to a 3-year high of 53.3, better than expectations of a decline to 49.7.
US July existing home sales unexpectedly rose +2.0% m/m to 4.01 million, stronger than expectations of -0.3% m/m to 3.92 million.
Kansas City Fed President Jeffrey Schmid said inflation risks are marginally higher than risks to the labor market, and “modestly restrictive” monetary policy is still appropriate.
Cleveland Fed President Beth Hammack said, “We have inflation that’s too high and has been trending upwards over the past year. With the information I have, if the FOMC meeting were tomorrow, I would not see a case for reducing interest rates.”
On the geopolitical front, US Vice President Vance said negotiations over ending Russia’s war in Ukraine are focused on security guarantees for Ukraine and territory Russia wants to control, including Ukrainian territory that it currently isn’t occupying, as the US tries to broker a peace deal between the two countries. The US is working to set up a meeting between President Putin and Zelensky, and if that meeting goes well, President Trump said he’ll look to follow up with a trilateral summit with the leaders. The outcome of the negotiations could have macroeconomic implications regarding tariffs and oil prices, and could, of course, have significant consequences for European security.
The focus of the markets this week will be on any new tariff news and signs of progress toward a Ukraine peace deal. On Friday, Fed Chair Powell speaks on the economic outlook at the Federal Reserve’s annual symposium at Jackson Hole, Wyoming.
Regarding tariffs, President Trump widened steel and aluminum tariffs to include more than 400 consumer items that contain the metals, such as motorcycles, auto parts, furniture components, and tableware. The change went into effect on Monday and did not exclude goods already in transit. Last Friday, Mr. Trump said, “I’ll be setting tariffs next week and the week after on steel and on, I would say chips – chips and semiconductors, we’ll be setting sometime next week, week after.” Mr. Trump last week said he planned a 100% tariff on semiconductors but would exempt companies that move chip manufacturing to the US. Mr. Trump also mentioned 200% or 300% tariffs on chips.
In other recent tariff news, Mr. Trump last Tuesday extended the tariff truce with China for another 90 days until November. On August 6, Mr. Trump announced that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India’s purchases of Russian oil. On August 5, Mr. Trump said that US tariffs on pharmaceutical imports would be announced “within the next week or so.” According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced.
Federal funds futures prices are discounting the chances for a -25 bp rate cut at 72% at the September 16-17 FOMC meeting, down from 93% last Thursday. The markets are discounting the chances at 49% for a second -25 bp rate cut at the following meeting on October 28-29.
Earnings reports indicate that S&P 500 earnings for Q2 are on track to rise +9.1% y/y, much better than the pre-season expectations of +2.8% y/y and the most in four years, according to Bloomberg Intelligence. With over 93% of S&P 500 firms having reported Q2 earnings, about 83% of companies exceeded profit estimates.
Overseas stock markets on Thursday settled mixed. The Euro Stoxx 50 closed down -0.19%. China’s Shanghai Composite rallied to a new 10-year high and closed up +0.13%. Japan’s Nikkei Stock 225 fell to a 1-week low and closed down -0.65%.
Interest Rates
September 10-year T-notes (ZNU5) on Thursday closed down -10 ticks, and the 10-year T-note yield rose +3.7 bp to 4.328%. Sep T-notes were under pressure Thursday on hawkish Fed comments. Kansas City Fed President Jeffrey Schmid said “modestly restrictive” monetary policy is still appropriate due to inflation risks, and Cleveland Fed President Beth Hammack said she does not favor cutting interest rates. T-notes added to their losses today after the Aug S&P manufacturing PMI expanded by the most in three years and after July existing home sales unexpectedly increased.
T-notes saw support from Fed-friendly US economic news that showed weekly jobless claims rose more than expected to a 2-month high, and the Aug Philadelphia Fed business outlook survey fell more than expected.
Fed Governor Lisa Cook said she intends to remain at the Fed despite calls from President Trump for her to resign over allegations that she committed mortgage fraud. If Cook is fired or resigns, Mr. Trump could appoint another Fed Governor who favors his lower interest rate policies.
European government bond yields on Thursday moved higher. The 10-year German bund yield rose +4.0 bp to 2.757%. The 10-year UK gilt yield rose +5.7 bp to 4.729%.
The Eurozone Aug S&P manufacturing PMI unexpectedly rose +0.7 to 50.5, stronger than expectations of a decline to 49.5 and the fastest pace of expansion in 3 years. The Aug composite PMI unexpectedly rose +0.2 to a 15-month high of 51.1, stronger than expectations of a decline to 50.6.
The Eurozone Aug consumer confidence index fell -0.8 to a 4-month low of -15.5, weaker than expectations of no change at -14.7.
Swaps are discounting the chances at 3% for a -25 bp rate cut by the ECB at the September 11 policy meeting.
US Stock Movers
Walmart (WMT) closed down more than -4% to lead losers in the Dow Jones Industrials after reporting Q2 adjusted ESP of 68 cents, weaker than the consensus of 74 cents. Costco Wholesale (COST) also closed down more than -2% on the news to lead losers in the Nasdaq 100.
SharkNinja Inc. (SN) closed down -3% after Chairman Wang sold 5 million shares in an overnight registered block trade between $116 and $118 per share.
Gilead Sciences (GILD) closed down more than -2% after Reuters reported that CVS Health declined to add the company’s HIV prevention shot to its drug coverage lists.
Airline stocks were under pressure Thursday after crude oil prices rallied to a 2-week high, which boosts jet fuel costs and lowers airlines’ profits. As a result, United Airlines Holdings (UAL) and Delta Air Lines (DAL) closed down more than -2%, and American Airlines Group (AAL) and Alaska Air Group (ALK) closed down more than -1%.
Maplebear Inc (CART) closed down more than -2% after Wedbush downgraded the stock to underperform from neutral with a price target of $42.
Monday.com Ltd (MNDY) closed down more than -1% after Bank of America Global Research downgraded the stock to neutral from buy.
Packaging stocks rose Thursday after Barclays said the announced closures of International Paper plants will reduce US containerboard capacity by about 2.5%. As a result, Packaging Corporation of America (PKG) closed up more than +6%, Smurfit WestRock (SW) closed up more than +4%, and International Paper (IP) closed up more than +2%.
PDD Holdings (PDD) closed up more than +4% to lead gainers in the Nasdaq 100 on bullish optimism for Chinese stocks after the Shanghai Composite rallied to a 10-year high today.
Nordson (NDSN) closed up +3% after reporting Q3 sales of $741.5 million, stronger than the consensus of $722.3 million.
Hewlett-Packard Enterprise (HPE) closed up more than +3% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $28.
Dayforce (DAY) closed up more than +2% after Thoma Bravo agreed to buy the company for $12.3 billion, or about $70 a share.
Humana (HUM) closed up more than +1% after RBC Capital Markets raised its price target on the stock to $322 from $283.
Earnings Reports(8/22/2025)
BJ’s Wholesale Club Holdings Inc (BJ), Buckle Inc/The (BKE), New Fortress Energy Inc (NFE), Ubiquiti Inc (UI).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Settle Lower as Bond Yields Rise on Hawkish Fed Comments

Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading today, for the October 3rd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAL options chain for the new October 3rd contracts and identified one put and one call contract of particular interest.
The put contract at the $12.00 strike price has a current bid of 11 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $12.00, but will also collect the premium, putting the cost basis of the shares at $11.89 (before broker commissions). To an investor already interested in purchasing shares of AAL, that could represent an attractive alternative to paying $12.55/share today.
Because the $12.00 strike represents an approximate 4% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 63%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.92% return on the cash commitment, or 7.78% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for American Airlines Group Inc, and highlighting in green where the $12.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $14.00 strike price has a current bid of 5 cents. If an investor was to purchase shares of AAL stock at the current price level of $12.55/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $14.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 11.95% if the stock gets called away at the October 3rd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $14.00 strike highlighted in red:
Considering the fact that the $14.00 strike represents an approximate 12% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 59%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.40% boost of extra return to the investor, or 3.38% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 73%, while the implied volatility in the call contract example is 83%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 250 trading day closing values as well as today's price of $12.55) to be 55%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Also see:
ACA YTD Return
Institutional Holders of ROCL
FPA YTD Return
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

October 3rd Options Now Available For American Airlines Group (AAL)

Key Points
Joby Aviation continues to make progress toward commencing commercial operations.
Vertical Aerospace is an eVTOL company offers investors an interesting way to play the market, and it trades on a low market cap, suggesting a favorable risk/reward proposition.
The Ark Space Exploration & Innovation ETF continues to rocket higher.
Joby Aviation (NYSE: JOBY) was part of the boom in businesses that went public via a special purpose acquisition company (SPAC) in 2021. But unlike many of those names, the electric vertical take-off and landing (eVTOL) aircraft company has made investors money -- staging an epic recovery after a multiyear downswing. Joby is up a staggering 219.2% in the last year, at the time of this writing.
Investors who are interested in Joby Aviation may also want to consider Vertical Aerospace (NYSE: EVTL), as well as an exchange-traded fund (ETF) -- the Ark Space Exploration & Innovation ETF (NYSEMKT: ARKX). Here's why these two growth stocks and ETF could be worth a closer look now.
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Things have heated up this summer for Joby Aviation
Scott Levine (Joby Aviation): While Joby Aviation is still waiting for the final certifications from the FAA to start ferrying passengers back and forth with its electric air taxi service, it doesn't mean the company is sitting idle. Over the past couple of months, Joby has reported some notable news indicating that the company is working hard to hit the ground running when it receives the requisite FAA certification, making it an eVTOL stock that demands to be on the radar of any investor interested in gaining exposure to the nascent industry.
Most recently, Joby notched an aviation industry first when it completed an eVTOL flight between two U.S. public airports: Marina and Monterey, both of which are in California. Management lauded the accomplishment "a major step as part of Joby's commercial market readiness, highlighting key capabilities across safety, operations, air traffic control, and certification progress."
But there are even bigger developments that the upstart eVTOL company reported this summer. For one, Joby announced its plan to acquire the urban air mobility business of Blade Air Mobility. When the transaction closes (presumably in the next few weeks), Joby will gain immediate market access to infrastructure assets, as well as urban corridors in New York City and Southern Europe.
Diversifying beyond the civilian market, Joby announced a partnership with L3Harris to collaborate on developing hybrid eVTOL aircraft suited for defense applications. Should the partnership with L3Harris, a leading defense contractor, bring a defense aircraft to fruition, it will help Joby diversify its revenue base and mitigate the risk associated with the company's air taxi business.
For investors looking to land an eVTOL stock in their portfolios, Joby is a consideration they can't afford to ignore.
An interesting eVTOL stock you probably haven't heard of
Lee Samaha (Vertical Aerospace): As you can see in the chart, the British eVTOL company's market cap is a mere fraction of its U.S. peers' market cap.
Part of it comes down to Vertical Aerospace's short financial runway. According to CEO Stuart Simpson, "Our cash runway takes us into the middle of 2026 with our cash and cash equivalents as of today, approximately $139 million."
Another part of it is possibly the different regulatory path followed by Vertical Aerospace. The company is seeking certification for its aircraft with the U.K.'s Civil Aviation Authority and the European Union Aviation Safety Agency. After this, it will work on certification with the FAA and other regulators worldwide.
However, the good news is that the current capital position will enable the company to "begin the assembly of our next aircraft, our pre-production or certification aircraft, and continue to expand our certification aircraft supply chain." Vertical recently completed the first public-to-airport eVTOL flight by a commercially planned vehicle. It also has 1,500 preorders in place for its aircraft, including from American Airlines and Japan Airlines.
Vertical Aerospace will require capital to complete its aims, and there are no guarantees it will. Still, it offers an interesting option for investors looking to diversify eVTOL holdings, and potentially more upside due to its low valuation.
Shoot for the stars with this high-octane ETF
Daniel Foelber (Ark Space Exploration & Innovation ETF): The Ark Space Exploration & Innovation ETF has been on a tear -- up 36.2% year to date and 78% over the last year. According to Ark Invest's overview of the ETF: "The advisor defines 'Space Exploration' as leading, enabling, or benefiting from technologically enabled products and/or services that occur beyond the surface of the Earth, including autonomous mobility, intelligent devices, advanced battery technologies, 3D printing, reusable rockets, adaptive robotics, and neural networks."
The fund addresses the space theme across industries -- through growth-focused companies as well as legacy industrial companies like L3Harris, Deere, and Komatsu. And like other Ark funds, the ETF is not remotely market-cap-weighted -- meaning that the highest-weighted holdings will be the fund managers' top picks rather than the most valuable companies. The fund's largest holding -- Kratos Defense & Security -- only has a market cap of $11.5 billion compared to $420.3 billion for fifth-place Palantir Technologies.
Vertical take-off and landing plays into the "space theme," with Archer Aviation, Joby Aviation, and Blade Air Mobility combining for 11.2% of the ETF. The ETF has many recognizable names, but also some companies you may have never heard of -- like unmanned aircraft system maker Aerovironment and satellite giant Iridium Communications -- the third- and fourth-largest holdings by weighting. Again, since the fund isn't market-cap weighted, it can put more conviction in these companies and still have small pieces of megacap growth companies. The fund holds Nvidia and Alphabet, but they only make up 2.7% and 1.7% of the fund, respectively.
The Ark Space Exploration & Innovation ETF sports a relatively high expense ratio at 0.75% -- which is far higher than the expense ratios investors may be used to from passive funds. The key difference is that the Ark Space Exploration & Innovation ETF is actively managed and very nuanced. The higher expense ratio is the fee for the active management, but it has certainly been worth it, given the fund's epic gains.
All told, the Ark Space Exploration & Innovation ETF could be a good pick for investors who are interested in "space" outside just eVTOL.
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Daniel Foelber has positions in Nvidia. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment, Alphabet, Deere & Company , L3Harris Technologies, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Like Joby Aviation? Then You'll Love This eVTOL Growth Stock and ETF.

Delta Air Lines DAL and American Airlines AAL are two well-known names in the Zacks Transportation- Airline industry, accounting for a significant market share in the U.S. airline space. Delta, based in Atlanta, GA, is a founding member of the SkyTeam alliance. It is known for its extensive domestic and international network. DAL and its alliance partners collectively serve over 120 countries and territories, with more than 800 destinations served globally.
On the other hand, American Airlines, based in Fort Worth, TX, is a founding member of the oneworld global alliance. AAL is known for its extensive domestic and international network. The carrier serves over 350 destinations globally, with more than 226 million passengers having boarded its flights in 2024.
Given this backdrop, let’s examine closely to find out which airline player currently holds the edge, and more importantly, which might be the smarter investment now.
The Case for AAL
While releasing its second-quarter 2025 results last month, AAL’s management gave an unimpressive outlook for the third quarter, wherein AAL expects a loss per share of 10-60 cents. Sluggish domestic travel demand results in more unsold seats and a decline in fares. Even though guidance for full-year 2025 has been reinstated, it is lower than the previous view, mainly due to the tariff-induced uncertainty, which is hurting air travel demand. AAL expects adjusted 2025 EPS to range from a loss of 20 cents to a profit of 80 cents. This is significantly lower than the previous forecast of $1.70 to $2.70 per share
AAL posted better-than-expected earnings per share in the June quarter, which meant that the company maintained its earnings surprise record, having surpassed estimates in each of the last four quarters.
American Airlines Price and EPS Surprise
Apart from the well-documented tariff-induced slowdown in domestic air travel demand, mishaps like those involving American Eagle Flight 5342 in January also put the stock on its back foot. American Eagle, encompassing regional carriers, is a subsidiary of AAL.
AAL’s financial metrics indicate that its leverage is elevated and is a massive negative for its shareholders. The long-term debt burden of the company was pinned at $25.3 billion at the end of the second quarter of 2025, which translates into a debt-to-capitalization of 94.9%, which is above the industry’s 56.6%.
High labor costs (expenses on salaries and wages were up 10.9% year over year in the second quarter of 2025), mainly due to the deal with pilots inked in 2023, are hurting AAL’s bottom line.
Earnings Estimates for AAL
Due to the above-mentioned headwinds, earnings per share estimates for third-quarter 2025, fourth-quarter 2025, full-year 2025, and 2026 have moved south over the past sixty days.
Image Source: Zacks Investment Research
On a brighter note, the southward movement of oil prices bodes well for AAL’s bottom-line growth. This is because fuel expenses are a significant input cost for the aviation space. Crude oil is struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence, and production increase by OPEC+ have all contributed to this downward pressure. As evidence, expenses on aircraft fuel and taxes decreased 13% to $2.67 billion in the second quarter of 2025. Average fuel price per gallon (including related taxes) decreased to $2.29 from $2.7 a year ago. The oil price-induced cost relief could support margins and lend ticket pricing flexibility to airlines like AAL in this uncertain era.
The Case for DAL
Delta reported better-than-expected revenues and earnings per share for the second quarter of 2025, driven by higher-than-expected passenger revenues. DAL reinstated its 2025 earnings per share guidance of $5.25-$6.25, which it had withdrawn earlier in the year. It expects free cash flow of $3-$4 billion for the year.
Despite the tough conditions, the airline demonstrated resilience and has beaten the Zacks Consensus Estimate for earnings thrice in the past four quarters (having missed the mark in the other quarters).
Delta Air Lines Price and EPS Surprise
Despite the earnings beat, the bottom line declined substantially year over year due to high labor costs. Even though the 90-day extension to the pause in higher tariffs against China serves as a breather, the lack of clarity on the tariff front means that the uncertain scenario is unlikely to go away soon. This is likely to continue hurting air travel demand.
However, the southward movement of oil price bodes well for the bottom-line growth of Delta. This is because fuel expenses are a significant input cost for the aviation space. Crude oil is struggling in 2025, with prices sliding to multi-month lows. A 13% drop in fuel expenses at DAL helped offset rising costs, aided by falling oil prices in the June quarter.
Highlighting its shareholder-friendly stance, DAL’s management announced a 25% hike in the quarterly dividend payout to 18.75 cents per share. This was the second dividend increase announced by DAL since its resumption of quarterly dividend payments following the COVID-induced hiatus. The decision reflects DAL’s shareholder-friendly approach. Financial prosperity owing to strong passenger revenues may have led to the dividend hike. DAL’s dividend yield is currently pegged at 1.23%. In this scenario of uncertainty, DAL’s dividend-paying capacity is a positive for income-seeking investors. This highlights confidence in its cash flow and prospects.
We remind investors that DAL had resumed paying quarterly dividends in 2023 of 10 cents per share after a COVID-induced hiatus. In June 2024, management announced a 50% hike in its quarterly dividend payout.
Delta’s liquidity position is encouraging. The airline ended the second quarter of 2025 with cash and cash equivalents of $3.33 billion, higher than the current debt level of $2.22 billion. DAL's efforts to repay its debts are encouraging, too. The company’s times interest earned ratio of 9 compares favorably with the industrial levels.
Upbeat Earnings Estimate Revision for DAL
Image Source: Zacks Investment Research
Conclusion
There is no doubt that tariff-induced uncertainty is hurting both AAL and DAL. A resolution of the problem, hints of which have been emanating lately, will serve both airlines well. Apart from the tariff-induced uncertainty, headwinds like high debt and labor costs are placing AAL on its back foot.
DAL’s strong liquidity and dividend-paying capacity, even in such an uncertain scenario, are huge positives and place it favorably when compared to AAL, which does not pay any dividends. In such a scenario, dividends are a major source of consistent income for investors, though they do not offer dramatic price appreciation. Stocks backed by regular dividends can reduce the volatility of a portfolio.
A good liquidity position gives operational flexibility, while the recent dividend hike indicates cash flow stability and a shareholder-friendly stance. In view of our analysis, DAL seems a better pick than AAL now.
While DAL carries a Zacks Rank #3 (Hold), AAL has a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

DAL vs. AAL: Which Airline Stock is a Stronger Play Now?

Key Points
A peer's troubles could lead to a reduction in capacity, and that's good news for the rest of the industry.
The airline industry is cyclical, and ticket pricing is highly sensitive to the demand/capacity equation.
Shares in American Airlines (NASDAQ: AAL) flew higher by more than 10% in the week to Friday morning. The circumstances behind the move are unusual outside the airline industry. Here's why.
Why American Airlines' stock took off
Usually, when a company issues an SEC filing warning that it has doubts over its ability to continue as a going concern, its peers sell off in sympathy. There's a logical sense to this because it indicates weak end-market conditions that all industry participants will suffer from.
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However, when Spirit Airlines did just that earlier in the week, some of its peers, including American Airlines soared.
The reason is that the market is pricing in a removal of capacity in the marketplace, which should enable more pricing power, notably for the budget airlines that Spirit competes directly, and also with network carriers like American Airlines whose ticket prices are also pulled down by competition from budget carriers on specific domestic routes.
Where next for American Airlines
The issue of capacity matching demand is a constant stress point in a cyclical industry like airlines. Overcapacity can lead to slashed ticket prices and profit margins; undercapacity leads to the opposite. Given the reduction in demand caused by the tariff conflict, airlines are reducing capacity. That's why the Spirit news is taken as a positive.
That said, it makes more sense to buy best-in-class stocks like Delta Air Lines and United Airlines.
Or at least it does until American Airlines can demonstrate an ability to improve its return on invested capital sufficient to cover its cost of capital consistently. Until then, Delta and United are the most attractive stocks in the sector.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why American Airlines Stock Flew Higher This Week

The S&P 500 Index ($SPX) (SPY) on Tuesday rose by +1.14%, the Dow Jones Industrials Index ($DOWI) (DIA) rose by +1.10%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose by +1.33%. September E-mini S&P futures (ESU25) rose by +1.06%, and September E-mini Nasdaq futures (NQU25) rose by +1.25%.
Stocks rallied after Tuesday's CPI report was largely in line with market expectations, thus strengthening expectations for a Fed rate cut at the September meeting. On a year-on-year basis, the July headline CPI of +2.7% y/y was slightly weaker than expected, but the core CPI of +3.1% y/y was slightly stronger than expected. The chances for a Fed rate cut at its Sep 16-17 meeting improved to 94% after Tuesday's CPI report from 88% on Monday.
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The 2-year T-note yield fell -4.0 bp to 3.729% on the CPI news. However, the 10-year T-note yield closed the day little changed and saw upward pressure after a new attack by President Trump on Fed Chair Powell. Mr. Trump said in a Truth Social post Tuesday morning that he is considering allowing a lawsuit against Mr. Powell related to construction work at Fed buildings. The markets are concerned about the inflation risks involved with the attempt by the Trump administration to push Mr. Powell out of the Fed as a means to push interest rates lower.
The July US CPI report of +0.2% m/m was in line with market expectations. The July CPI year-on-year figure of +2.7% y/y was unchanged from June and was slightly weaker than expectations for a +0.1 point increase to +2.8%. The July US core CPI report of +0.3% m/m was in line with expectations. The July year-on-year core CPI figure of +3.1% y/y was up from June's +2.9% and was slightly stronger than market expectations of +3.0%. July's headline CPI of +2.7% y/y and core CPI of +3.1% y/y were up from the post-Covid 4.25-year lows of +2.3% and +2.8%, respectively, posted earlier this year.
President Trump signed an executive order overnight extending the US-China tariff truce by 90 days through November 10 to allow more time for negotiators to reach a final deal. That was in line with reporting yesterday by CNBC. The executive order postponed Tuesday's original deadline. That followed previous news that Nvidia and AMD agreed to pay the US government 15% of their revenues on sales of certain lower-powered AI chips sold to China in exchange for export licenses to allow those sales. However, Bloomberg reported today that China's government urged Chinese companies to avoid using Nvidia's H20 processors, particularly for government-related purposes.
The markets are awaiting this Friday's Trump-Putin summit in Alaska for any progress in ending the Russian-Ukrainian war. President Trump on Monday downplayed expectations of a breakthrough, saying the summit is a "feel-out meeting" to end the war in Ukraine. Also, recent comments from Ukrainian President Zelenskiy dampened hopes for a quick end to the war when he rejected any talk of Ukraine ceding territory to Russia.
In recent tariff news, President Trump early Tuesday extended the tariff truce with China, which was to expire on Tuesday, for another 90 days. Last Wednesday, President Trump announced that he will impose a 100% tariff on semiconductor imports. Still, companies would be eligible for exemptions if they demonstrate a commitment to building their products in the US. However, the US will levy a separate tax on imports of electronic products that employ semiconductors. Also, President Trump announced last Wednesday that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India's purchases of Russian oil. Last Tuesday, Mr. Trump said that US tariffs on pharmaceutical imports would be announced "within the next week or so." According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced.
The market's focus this week is on corporate earnings results and any new trade or tariff news. On Thursday, weekly initial unemployment claims are expected to fall by -1,000 to 225,000. Also on Thursday, the July final-demand PPI is expected to increase to +2.5% y/y from +2.3% y/y in June, and the July PPI ex-food and energy is expected to rise to +2.9% y/y from +2.6% y/y in June. On Friday, July US retail sales are expected to climb +0.5% m/m and retail sales ex-autos are expected to rise +0.3% m/m. Also on Friday, July manufacturing production is expected to remain unchanged m/m. Finally, the University of Michigan's Aug US consumer sentiment index is expected to climb by +0.3 to 62.0.
Federal funds futures prices are discounting the chances for a -25 bp rate cut at 94% at the September 16-17 FOMC meeting and 62% at the following meeting on October 28-29.
Earnings reports indicate that S&P 500 earnings for Q2 are on track to rise +9.1% y/y, much better than the pre-season expectations of +2.8% y/y and the most in four years, according to Bloomberg Intelligence. With over 82% of S&P 500 firms having reported Q2 earnings, about 82% of companies exceeded profit estimates.
Overseas stock markets on Tuesday closed the day higher. The Euro Stoxx 50 closed the day up +0.08%. China's Shanghai Composite rallied to a 10-month high and closed up +0.50%. Japan's Nikkei Stock 225 today closed up +2.15% and posted a new record high.
Interest Rates
September 10-year T-notes (ZNU25) on Tuesday fell by -2 ticks, and the 10-year T-note yield ended the day unchanged at 4.285%. T-note prices received an initial boost from the CPI report but then fell back after President Trump launched another broadside against Fed Chair Powell regarding construction costs on Fed buildings. T-note prices had support from Tuesday's -1.4 bp decline in the 10-year inflation expectations rate to 2.386%.
European government bond yields rose on Tuesday. The 10-year German bund yield rose +4.8 bp to 2.744%. The 10-year UK gilt yield rose +6.1 bp to 4.626%.
Swaps are discounting the chances at 5% for a -25 bp rate cut by the ECB at the September 11 policy meeting.
US Stock Movers
The Magnificent Seven all closed higher on Tuesday, with Meta (META) leading the bunch with a gain of +3.15%. Nvidia (NVDA) closed the day up +0.57% despite a report that the Chinese government is discouraging Chinese companies from buying Nvidia AI chips, even if the US government allows the sale.
Chip stocks led the Nasdaq 100 index higher, with gains of 5% or more in NXP Semiconductors (NXPI), ON Semiconductors (ON), Microchip Technology (MCHP), and Texas Instruments (TXN).
United Airlines (UAL) was the biggest gainer in the S&P 500 index with a gain of more than +10%. Airlines were boosted by lower oil prices. American Airlines (AAL) rallied nearly +12% and Delta Airlines (DAL) rallied by +9%. However, Spirit Aviation (FLYY) plunged -41% after its subsidiary Spirit Airlines issued a going-concern warning.
Hanesbrands (HBI) rallied +28% after the Financial Times reported that a deal is nearing for Gildan Activewear to acquire Hanesbrands for as much as $5 billion in enterprise value.
Paramount Skydance (PSKY) rallied by more than +8% after Guggenheim started coverage on the company with a buy rating and a $13 price target due to a positive outlook for the merged entities of Paramount Global and Skydance Media.
Starbucks (SBUX) closed the day up +1.8% on an upgrade to outperform from neutral from Baird.
Cardinal Health (CAH) fell by -7.2% after its fiscal Q4 operating income was below market expectations.
Getty Images (GETY) fell by -2.3% on disappointment after releasing Q2 earnings and guidance.
Earnings Reports (8/13/2025)
Loar Holdings Inc (LOAR), Performance Food Group Co (PFGC), StandardAero Inc (SARO), Coherent Corp (COHR), Cisco Systems Inc (CSCO).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Rally on Higher Odds for Fed Rate Cut after CPI Report

In a bid to attract additional traffic, American Airlines AAL has decided to expand its international network. To this end, AAL announced six new routes to Europe and South America for travelers to experience in summer 2026.
As part of its expansion initiative, American Airlines will debut a new service to Prague and start the sole nonstop service from the United States to Budapest, Hungary. The airline will also add new routes to tourist-friendly destinations, including Athens, Greece, Milan and Zurich. Moreover, AAL will expand its service to Buenos Aires, Argentina, from May 21 to Aug. 3, 2026, where it currently offers only winter-seasonal service. Next summer, AAL will operate four weekly flights on the route.
The seasonal service from Philadelphia to Prague will start from May 21, as will seasonal flights from Philadelphia to Budapest. Flights from Miami to Milan will operate year-round from March 29. Meanwhile, flights on the Dallas-Zurich route will operate from May 21 to Aug. 4. Seasonal flights on the Dallas-Athens route will operate from May 21. AAL intends to offer a record 18 daily flights next summer from the United States to Italy and Greece.
AAL intends to offer increased premium cabin offerings for passengers travelling to Asia next summer. To this end, the carrier aims to boost the premium seating capacity to Tokyo from Dallas and Los Angeles by more than 45% next summer, compared with the summer of 2025.
AAL’s announcement to expand its international network is in line with its efforts to strengthen presence in markets with high potential. Despite the tariff-induced uncertainty, international revenues remain strong, owing to the buoyant demand for long-haul travel. Given this scenario, AAL’s decision to boost its international network is a highly prudent one.
Taking a Look At AAL’s Peers Regarding Internal Expansion
This summer, Delta Air Lines DAL operated nonstop flights to Copenhagen and Stockholm, as well as to more than 35 destinations across Scandinavia, through its partnership with Scandinavian Airlines System, the flag carrier of Denmark, Norway, and Sweden. We remind investors that Delta Air Lines and SAS inked a codeshare agreement last year to improve connectivity between North America and Scandinavia. Out of the 35 additional destinations operated by Delta Air Lines, six are in Denmark, 14 are in Norway and 15 in Sweden.
With long-haul travel demand remaining impressive, United Airlines UAL has decided to grow its Pacific flights. UAL has decided to introduce service to destinations like Thailand and Vietnam. United Airlines positions itself as the first airline to provide nonstop service to Adelaide, Australia. Starting Dec. 11, 2025, United Airlines is expected to start its nonstop three-times-weekly seasonal service from San Francisco to Adelaide, targeting the Australian summer season.
AAL’s Price Performance, Valuation and Estimates
Shares of AAL have gained 18.1% in a year compared with the Zacks Transportation-Airline industry’s 51% uptick in the same timeframe.
Image Source: Zacks Investment Research
From a valuation standpoint, AAL trades at a 12-month forward price-to-sales of 0.14X. AAL is inexpensive compared with its industry.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AAL’s 2025 and 2026 earnings has been revised downward over the past 60 days.
Image Source: Zacks Investment Research
AAL's Zacks Rank
AAL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

American Airlines' Expansion Efforts Look Good: A Sign for Upside?

The Simplify Macro Strategy ETF is seeing unusually high volume in afternoon trading Monday, with over 22.6 million shares traded versus three month average volume of about 3.7 million. Shares of FIG were off about 22.4% on the day.
Components of that ETF with the highest volume on Monday were American Airlines Group, trading up about 1.1% with over 27.7 million shares changing hands so far this session, and Ford Motor, up about 1.3% on volume of over 24.8 million shares. Idexx Laboratories is the component faring the best Monday, higher by about 26.4% on the day, while ON Semiconductor is lagging other components of the Simplify Macro Strategy ETF, trading lower by about 10.8%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

American Airlines Group, Inc.

Price history and volume

Shares 360

Investment risk — medium

Investment potential — medium

AI Factors

Inflation

Japanese Economy

USD Average Exchange Rate

Oil Prices

Labor Costs

Security parameters