American Airlines (AAL) Q4 Pre-earnings: Here’s what to expect

American Airlines (AAL) is set to announce its Q4 results on January 23rd. Shares of this carrier have risen more than 37% over the past year, driven by robust demand for flights, analyst upgrades, strong execution and positive Q3 results. Wall Street analysts expect the company to report earnings of $0.66 per share. share for Q4, up 127% year-over-year.

Meanwhile, revenue is expected to rise 3% year-over-year, reaching $13.43 billion for the quarter. It’s interesting to note that American Airlines has beaten analysts’ earnings expectations for eight out of nine consecutive quarters.

Analysts’ views on AAL ahead of Q4 results

Ahead of the company’s Q4 results, several analysts maintained their ratings on the stock, with many raising their price targets.

Recently, Evercore ISI analyst Duane Pfennigwerth raised his price target on AAL stock to $18 from $13 and reaffirmed a Hold recommendation. The analyst expects strong Q4 results, driven by stronger-than-expected post-election demand. He also believes that the period between Thanksgiving and the peak season and corporate travel toward the end of the year likely also contributed to robust results.

Similarly, analyst Sheila Kahyaoglu of Jefferies expects American Airlines to report strong results in the upcoming 4th quarter. She upgraded the stock to a buy rating and gave it a $20.00 price target. Kahyaoglu argues that with disciplined capacity management and a strong network, American Airlines is well positioned for revenue growth and is outperforming its competitors.

What do Option traders expect?

Using TipRanks’ Options tool, we can see what options traders expect from the stock immediately after the earnings report. The expected earnings move is determined by calculating the “at-the-money straddle” of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Preferences tool does this for you.

In fact, it currently says options traders expect a 7.78% move in either direction.

Is AAL a good stock to buy now?

As for Wall Street, analysts have a Moderate Buy consensus rating on UAL stock based on nine buys and four holds assigned in the past three months, as shown in the graphic below. The average AAL price target of $21.50 per stock implies 15.34% upside potential.

See more AAL analyst ratings

Disclosure