TLDR
- American Airlines (AAL) trades at just 0.2x price-to-sales, with a Citi analyst price target of $21 — roughly 60% above current levels.
- The company expects 2026 EPS of $1.70–$2.70, with consensus now at $2.09, nearly six times 2025’s 36 cents.
- AAL reduced debt by over $2 billion last year and plans to get total debt below $35 billion in 2026, a year ahead of schedule.
- A new exclusive Citi credit-card deal, which started January 1, is expected to add $1.5 billion in annual EBIT by end of decade.
- AAL and Miami-Dade County announced a $1 billion investment in a new Concourse D at Miami International Airport, breaking ground in 2027.
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American Airlines Group (AAL) has been the clear laggard among the Big Three legacy carriers for years. Delta is up 221% from its March 2020 pandemic low, United has surged more than 400%, and AAL has managed just 28%.
American Airlines Group Inc., AAL
That gap is getting harder to ignore.
AAL currently trades around $13.32, with a market cap of $8.8 billion. The average analyst price target sits near $18, implying upside of more than a third from current levels.
Citi analyst John Godyn goes further, with a $21 target — about 60% above where the stock trades today. His view: the negative narrative around competition with United in Chicago has largely peaked.
Ryan Kelley, CIO at Hennessy Funds — which holds AAL among its top 10 positions in its mid-cap portfolios — points to the valuation. At 0.2 times price-to-sales, the stock is cheap. “American is very attractively priced, is cash-flow positive, and it has good momentum,” he said.
The January earnings report disappointed on the surface, hit by a drop in government revenue from the federal shutdown and costs tied to winter storm Fern. But the underlying full-year guidance told a different story.
Earnings Recovery Taking Shape
AAL guided for 2026 EPS of $1.70 to $2.70. The midpoint came in above the then-consensus of $1.97. Wall Street has since moved estimates up to $2.09 — nearly six times the 36 cents AAL earned in 2025.
After two consecutive years of earnings declines, 2026 is shaping up as the year the trend reverses.
Analysts are modeling for nearly 30% EPS growth in 2027, to around $2.72 per share.
Bernstein analyst David Vernon said consensus EPS estimates for 2026 “could go up double digits” given robust premium sales, healthy corporate travel, and improving booking trends.
Morgan Stanley analyst Ravi Shanker noted the last earnings call sounded more like a normal mainline carrier rather than one apologizing for strategic mistakes.
Debt, Deals, and Miami
On the balance sheet, AAL cut debt by more than $2 billion last year. The company now expects total debt to fall below $35 billion in 2026 — a year ahead of its original schedule.
The new exclusive credit-card agreement with Citigroup, which kicked in on January 1, is expected to generate an incremental $1.5 billion in annual EBIT by the end of the decade, with an immediate benefit to 2026 EPS.
Premium travel demand continues to support the thesis. Delta reported that premium cabin revenue surpassed main cabin for the first time in Q4. AAL has seen similar trends with higher-income fliers.
Options activity on Tuesday showed calls leading puts at a ratio of 0.33, well below the typical 1.18, pointing to a bullish lean in the options market.
On Tuesday, AAL and Miami-Dade County announced a $1 billion investment to build a new Concourse D at Miami International Airport. CEO Robert Isom called it “a transformational project.” Ground breaks in 2027.
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