American Airlines reached a tipping point in its recovery from the global pandemic recently when it announced that it plans to resume hiring pilots for its commercial aircraft. The company announced that it would hire 300 pilots by the end of this year and double that to 600 new pilots in 2022. The Fort Worth, Texas-based airline, which is the largest carrier globally, employs about 15,000 pilots in total.
Even before the pandemic, American Airlines’ earnings and revenue had been weak for some time. Over the last three years, American Airlines’ earnings per share were flat on an annual basis, with revenue falling at an average of 18%. In its first-quarter report in April, American Airlines reported a loss of $4.32 a share with revenue plunging to $4 billion. The bottom line beat Wall Street estimates, but revenue fell short.
On average, analysts expect that American Airlines Group will report full-year sales of $28 billion for the current year, with estimates ranging from $24.60 billion to $30.21 billion. For the next year, analysts expect that the firm will report sales of $38.67 billion, with estimates ranging from $32.55 billion to $46.20 billion.
American Airlines stock is not in a buy zone now and still faces longer-term headwinds. Even after the pandemic eases, the travel sector isn’t expected to rebound quickly as different markets come back sooner than others, with jurisdictions placing various restrictions on the industry. Bottom line: American Airlines stock isn’t a buy right now and has even made bearish moves that could be seen as sell signs.
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