Analyst upgrades American Airlines as industry thrives

On February 26, 2025, in the United States, analyst James Goodall from Redburn Atlantic announced a significant upgrade for American Airlines (AAL). He changed the rating from neutral to buy and raised the price target from $18 to $24. This revised target suggests a potential upside of 58.6% from the previous closing price. Goodall's optimistic view is grounded in the belief that the U.S. airline industry is entering a favorable period characterized by tightened aircraft supply, leading to improved capacity discipline and robust demand. He pointed out that American Airlines is well-positioned to capture market share, especially in the international and premium segments. Despite recent concerns regarding its first-quarter earnings forecast, Goodall remains confident in the airline's ability to sustain a focus on costs, indicating a strong probability of margin expansion and improved cash flow. In total, over half of Wall Street analysts share a positive outlook for American Airlines, with a majority rating the stock as a strong buy or buy. The company might experience solid free cash flow performance this year, estimated at $2.6 billion, which further strengthens the positive sentiment among investors. Overall, the upgrade reflects confidence in the airline's capability to adapt and thrive amid changing market conditions.