After a difficult 2024, American Airlines (AAL) is getting a big tailwind as it launches into 2025. The company received upgraded stock recommendations from two investment banks, TD Cowen and Jeffries (JEF).
The carrier was upgraded to 'buy' from 'hold' by two major banks
After a difficult 2024, American Airlines (AAL) is getting a big tailwind as it launches into 2025. The company received upgraded stock recommendations from two investment banks, TD Cowen and Jeffries (JEF).
“In hindsight, we were too early with our upgrade a year ago and then failed to appreciate the transitory nature of their headwinds when we downgraded the shares in July,” the analysts at TD Cowen wrote in their report. “We often write about industry leaders and laggards. We believe that American has an enviable franchise of its own and should be viewed among the industry ‘haves’ vs the ‘have-nots.’”
TD Cowen raised its price target for American to $25 per share from its prior $17 expectation. Jeffries is raising its target from $12 to $20 per share. The company’s stock is currently trading at about $17.70; shares rose 4% in Monday morning trading.
Last summer, American was dealing with some turmoil in its business-class business. The company was trying to bring more of that revenue in-house rather than get it through travel agents. It made it harder for customers to get rewards points if they didn’t book directly with American, and a lot of them responded with umbrage. In the wake of that controversy, the company parted ways with former Chief Commercial Officer Vasu Raja.
“We will continue our relentless focus on reestablishing relationships with our business customers, re-embracing the agency channel, and making it easier to do business with American,” CEO Robert Isom said during the company’s most recent earnings call.
Additional business boosts identified by the two banks include a new loyalty program credit card deal with Citibank and a better pricing environment thanks to airlines across the industry pulling back on how much supply they’re offering.
“Market capacity discipline in 2025 is welcome,” Jeffries analysts wrote in their note.
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