Is It Too Early To Buy American Airlines Stock?

October 29th, 2026 · by Trefis TeamAALYTD-17.9%SPYYTD+13.9%XLIYTD+9.2%Analyze AAL →For questions about this article or underlying research, email help@trefis.com.

Shares of American Airlines (AAL) have fallen 18.5% over the past three months, while the S&P 500 gained 4.4%. At $12.58, the stock sits 30.7% below its July high, and a buyer who has waited for a lower price may think this is it. Yet the airline has grown its sales without growing its profit. Is $12.58 a low price for what American Airlines earns today?

_Image from Pixabay Is American Airlines Stock Cheap At $12.58?

American Airlines stock is cheap relative to sales, but the profit generated from those sales is low by its own history too. At the end of September, the shares traded at 0.145 times twelve months of sales. The stock was cheaper by that measure at only 7 of the 40 quarter ends since the end of 2016. The airline posted a 1.7% operating margin over those twelve months, compared to 4.2% a year earlier, and margins were lower at only 10 of those quarter ends.

After recording a net loss of $481 million over the past twelve months, the stock has no meaningful P/E. Shares also appear inexpensive against cash, trading at 2.0 times operating cash flow, though almost all of that cash arrived in the first quarter of 2026. Management says earnings, not financial deals, are the key to repairing its balance sheet, and earnings are where the damage shows.

Management attributes that damage to fuel. Higher fuel prices added $1.9 billion to costs in the third quarter. While sales rose 19.3% in the quarter, operating income fell to $124 million from $158 million a year earlier. So the stock is cheap against sales, but a net loss leaves no earnings for the price to look cheap against.

American Airlines Expects Another Loss In Its Fourth Quarter

Management expects fourth-quarter revenue to grow 19.5% to 22.5% from a year earlier. Analysts project fourth-quarter revenue of about $17.0 billion, a figure falling within management’s guidance. On last year’s fourth-quarter revenue of $14.0 billion, that guidance points to about $16.7 billion to $17.1 billion. So analysts expect American Airlines to deliver on that guidance, which forecasts another loss: an adjusted loss of $0.50 to $1.10 a share.

The pressure comes from fuel. Management expects fuel to cost about $4.70 a gallon on average in the quarter, up from the $3.85 the airline paid in the third quarter.

Management says demand is holding up. The airline’s managed corporate revenue rose 28% in the third quarter, marking its sixth straight quarter of double-digit growth, and total revenue came in above the high end of guidance. Management expects margins to widen meaningfully when fuel prices stabilize.

When Is American Airlines’ Next Report?

American Airlines is expected to report its fourth-quarter results in January 2027. Following recent reports, the stock has moved in both directions. Shares rose 10.3% in the two trading days after the July 2026 report, while they slipped 0.8% after the April 2026 report. Shares rose 10.3% in the two trading days after the July 2026 report, while they slipped 0.8% after the April 2026 report. After the October 22 report, shares fell 3.2% over the same two-day span.

The stock can also fall far during a market shock. Shares dropped 43% during the 2025 US Tariff Shock, compared to a 19% decline for the S&P 500. A buyer acting before January will hold the stock through any such shock that occurs in the meantime.

When American Airlines reports in January 2027, the two numbers to watch are its fourth-quarter revenue growth against its own guidance and the price paid per gallon of fuel. Until then, the stock is not cheap for what the airline earns, and the quarter covered by that report is guided to a loss.

How To Act On AAL?

Not necessarily on American Airlines alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from American Airlines’ own industry that have beaten it. Over the five years to October 2026, Delta Air Lines stock rose 113% and United Airlines stock rose 125%, while American Airlines stock fell 34%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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