Why American Airlines Is Losing Altitude Today
Shares of American Airlines Group (NASDAQ: AAL) traded down by as much as 4.7% on Monday after Citi cut its price target on the stock. The carrier is more vulnerable than most of its peers in the event of a downturn, according to the bank's analyst. As of 1:24 p.m. ET, the airline's shares were off by 3.9%.
Airline investors have endured a rough couple of years. The pandemic drastically crimped demand for air travel, which compelled airlines to cut costs and take on billions in new debt and equity financing to survive. Their fledgling comeback in 2022 has been stunted by higher fuel and labor costs, and now investors worry that rising interest rates and an economic slowdown might eat into travel demand.
If the sector does hit turbulence, Citi analyst Stephen Trent would rather not be flying with American. On Monday, Trent lowered his price target on American shares to $15.75 from $22, and kept a neutral rating in place. Trent wrote that American's financial leverage is higher than its peers, and it faces more regulatory uncertainty than other large carriers due to its recent agreements with JetBlue Airways and other partners.
Source Fool.com