Raymond James has reaffirmed a Market Perform rating on American Airlines (AAL), citing a balanced risk-reward profile for the airline despite elements of upside in recent results and guidance. The stock is trading at $13.85, and InvestingPro data shows it as slightly undervalued on a Fair Value basis while carrying a high trailing price-to-earnings multiple of 82.2.
The broker highlighted American Airlines’ first-quarter 2026 year-over-year revenue guidance, noting that when adjusted for the effects of Winter Storm Fern the guidance topped both Raymond James’ internal forecast and the consensus view. On an unadjusted sequential basis, the carrier reported roughly a 6.5 percentage-point acceleration in revenue trends - the largest jump among its peer group using the unadjusted comparison.
Raymond James attributed the stronger start to the year to robust early-year demand across U.S. carriers as well as company-specific initiatives, including benefits from American’s partnership with Citibank. The firm also noted that American had an approximately 1.5 percentage-point easier comparison stemming from the PSA Flight 5342 tragedy, which aided year-over-year comparisons.
American remains a major operator in the passenger airlines industry, with annual revenue of $54.63 billion. Management has also signaled progress on reducing leverage - the company now expects to achieve an adjusted debt level below $35 billion by year-end 2026, a target moved forward from an earlier expectation of reaching that level by year-end 2027. In response to the improved balance sheet outlook, Raymond James raised its earnings-per-share estimates for fiscal years 2026 and 2027.
InvestingPro data shows American’s reported total debt at $36.88 billion, and analysts on average forecast EPS of $2.11 for fiscal 2026. Despite the upward revisions to EPS, Raymond James elected to keep a Market Perform stance given that American still carries materially more debt and exhibits a substantially lower margin profile than its larger competitors. Those factors, the firm said, increase earnings volatility and downside risk.
Additional financial metrics cited in third-party data underline the company’s liquidity constraints: a current ratio of 0.5 indicates short-term obligations exceed readily available liquid assets. The broader analyst consensus score noted in InvestingPro remains neutral at 2.08. For investors seeking more detailed analysis, a Pro Research Report covering AAL is available alongside reports on more than 1,400 other U.S. equities.
Recent company-specific developments and peer actions were also noted. American reported fourth-quarter 2025 earnings per share of $0.16, below the analyst expectation of $0.34; management attributed a material portion of the miss to a government shutdown that it said cost roughly $325 million in revenue. The airline also recorded a 2.5% year-over-year decline in passenger revenue per available seat mile.
Following American’s 2026 guidance - which exceeded pre-earnings consensus by 12% - BMO Capital raised its price target to $17.00. At the same time, TD Cowen trimmed its price target to $17.00, pointing to first-quarter disruptions from Winter Storm Fern as a headwind for near-term results. Evercore ISI held an In Line rating with a $17.00 price target, calling out declines in pre-tax margins and unit revenue as areas of concern.
On the operational front, American plans to resume flights between the United States and Venezuela, becoming the first U.S. carrier to restart service to the country since 2019.
Raymond James’ retention of a Market Perform rating reflects a view that, while the airline is showing encouraging top-line momentum and is accelerating debt reduction, material balance-sheet and margin differentials relative to peers underpin continued earnings risk. Investors evaluating AAL should weigh the improved earnings outlook and faster path to lower leverage against those persistent structural weaknesses.
Note: InvestingPro-sourced metrics referenced above include fair value signals, debt and liquidity measures, analyst consensus and EPS forecasts. A Pro Research Report is available for deeper financial and operational detail.