American Airlines Stock Down 24.6% in a month: More Pain Ahead?

Core Viewpoint - American Airlines (AAL) has experienced a significant decline in share price, dropping 24.6% over the past 30 days, which is worse than the Zacks Transportation - Airline industry's decline of 5.2% [1][4]. Group 1: Financial Performance and Guidance - AAL has revised its first-quarter 2025 guidance downward, now expecting a loss per share of 60-80 cents, compared to the previous expectation of a loss of 20-40 cents [5]. - First-quarter total revenues are anticipated to be approximately flat year-over-year, a decline from the prior expectation of 3-5% growth [5]. - System capacity is expected to remain flat or decrease by up to 2% from first-quarter 2024 levels, while cost per available seat mile (adjusted) is projected to increase in high-single digits from first-quarter 2024 actuals [6]. Group 2: Market Dynamics and Competitive Position - AAL has lost business travelers to competitors due to a faulty sales strategy implemented in 2023, and efforts to regain corporate travel are progressing slowly [7]. - The company faces additional challenges due to a recent plane mishap involving a collision with a U.S. Army helicopter, which resulted in the loss of all 64 people on board [8]. Group 3: Estimate Revisions and Market Sentiment - The Zacks Consensus Estimate for AAL's earnings has declined over the past 60 days for first-quarter 2025, second-quarter 2025, and full-year 2025 and 2026 [11]. - Current estimates show a downward trend, with the first-quarter estimate moving from 0.04 to -0.45 over the past 60 days, reflecting a significant negative revision of 1,225% [12].