2 Airline Stocks Lifting Off After Earnings

Core Insights - Airline stocks are under scrutiny as American Airlines Group Inc (AAL) and Southwest Airlines (LUV) reported smaller-than-expected first-quarter losses and withdrew their full-year guidance, reflecting a challenging U.S. economic outlook [1] Group 1: Stock Performance - AAL shares are down more than 40% this year, trading at $9.56, with a significant decline of 45% in 2025 and 31% year-over-year [2] - LUV shares are down 22% in 2025 and nearly 11% year-over-year, currently trading at $26.21 [2] Group 2: Analyst Ratings - AAL faces a higher downgrade risk, with 11 out of 20 brokerages maintaining a "buy" or better rating, while only one has a "sell" rating; the consensus 12-month price target is $56.30, indicating a 54% upside potential from current levels [4] - Analysts are more cautious with LUV, as the majority hold a "hold" rating [4] Group 3: Options Trading Strategies - AAL has outperformed options traders' volatility expectations, reflected in a Schaeffer's Volatility Scorecard (SVS) of 96 out of 100, suggesting a bullish outlook [5] - LUV has a low SVS of 1 out of 100, indicating that a premium-selling strategy may be more appropriate for options traders [5]