American Airlines Stock Has Struggled To Outperform The S&P- Here’s Why
American Airlines Group Inc (NASDAQ: AAL) stock price lost almost 60% from $32 in 2018 end to around $13 currently, primarily due to unfavorable changes in its P/S multiple. During this period, the company’s sales have risen just around 2%, and there was a strong 32% rise in the outstanding share count. Additionally, over the same period, the S&P 500 returned around 55%, meaning that American Airlines stock has strongly underperformed the index since 2018-end.
In our interactive dashboard, Why American Airlines Stock Moved: AAL Stock Has Lost 59% Since 2018, we break down the factors behind this move.
(A) AAL’s Total Revenue has risen marginally from $44.5 billion in FY 2018 to $45.2 billion on an LTM basis
- AAL’s total revenue initially rose from $44.5 billion in FY 2018 to $45.8 billion in FY 2019, but dropped sharply to $17.3 billion in FY 2020.
- Revenues have strongly recovered since, jumping to $29.9 billion in FY ’21, and now stand much higher at $45.2 billion on an LTM basis, slightly higher than its FY ’18 level.
- One of the major airlines of the United States, around 87% of American Airlines’ sales came from the Passenger segment as of FY ’21, standing at around $26.1 billion.
- Cargo and Other sales brought in the remaining 13% of sales in FY ’21.
- For additional details about AAL’s revenues and comparison to peers, see American Airlines Group (AAL) Revenue Comparison
- Should You Pick American Airlines Stock At $14 After A 6% Fall In A Week?
- With 20% Gains This Month Is Alaska Air A Better Pick Than American Airlines Stock?
- Which Airlines Stock Will Offer Better Returns – American Or United?
- What To Expect From American Airlines’ Q2?
- Will American Airlines Stock Recover To Its Pre-Inflation-Shock Level?
- Pick Either American Airlines Stock Or Its Peer – Both May Offer Similar Returns
(B) Revenue per share (RPS) decreased 23% from $90.07 in FY 2018 to $69.27 currently
- AAL’s revenue rose from $44.5 billion in FY 2018 to $45.2 billion currently, while the outstanding share count rose from 494.5 million in 2018 to 652.7 million currently.
- Due to this, RPS has dropped from $90.07 in FY ’18 to $69.27 currently.
(C) Price-To-Sales (P/S) multiple for AAL hovered around 0.4x between 2018 and 2021 end, but has dropped sharply to 0.2x currently
- AAL’s P/S multiple stood at around 0.4x by late 2021, but due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 0.2x.
- For additional details about the company stock returns, and comparison to peers, see American Airlines (AAL) Stock Return Comparison.
What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.
| Returns | Dec 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| AAL Return | -9% | -27% | -72% |
| S&P 500 Return | -5% | -18% | 74% |
| Trefis Multi-Strategy Portfolio | -5% | -22% | 215% |
[1] Month-to-date and year-to-date as of 12/21/2022
[2] Cumulative total returns since the end of 2016
Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates