馃洬 AMERICAN AIRLINES: ANALYSIS 馃洭
American Airlines Group [AAL] provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo. As of December 31, 2022, it operated a mainline fleet of 925 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1926 and is headquartered in Fort Worth, Texas.
Based on a sample of the last year, its average margins have been:
- Gross margin: ± 24%
- Operating margin: ± 6%
- Net margin: ± 3%
- EBITDA margin: ± 12%
The normalized EPS was ± $4.03 USD and its last ROIC [TTM] was ± 13.81%. If an average PER 6 is set as a benchmark, the potential spread target could be:
- Optimistic: ± $27.5 USD
- Neutral: ± $24.1 USD
- Negative: ± $20.8 USD
In other hand, if an average EV/EBITDA 8 is set, an EBITDA increases of 10%, a Net Debt reduction of 2% and Shares Outstanding increases of 0%, the potencial price target could be ± $37 USD.
The pros: Strong revenue growth (an increase of 4.7% from the same quarter in 2022. This growth was driven by strong passenger demand, which increased by 6.1% year-over-year), improved profitability (driven by higher revenue and lower costs) and positive outlook.
The cons: Higher fuel prices (could impact the company's profitability in the future), labor shortages (the company is working to address this issue by hiring more employees and offering higher wages, but it could reduce their profits), excessive net debt (bad impact with the current interest rates) and economic uncertainty.
The best analysis is yours!
J. Joel Padilla
https://www.linkedin.com/in/joelpadilla/recent-activity/
https://jjoelpadilla.wixsite.com/jjpl-index
https://jjplindex.blogspot.com/
Copyright: Joel Padilla 2023
Based on a sample of the last year, its average margins have been:
- Gross margin: ± 24%
- Operating margin: ± 6%
- Net margin: ± 3%
- EBITDA margin: ± 12%
The normalized EPS was ± $4.03 USD and its last ROIC [TTM] was ± 13.81%. If an average PER 6 is set as a benchmark, the potential spread target could be:
- Optimistic: ± $27.5 USD
- Neutral: ± $24.1 USD
- Negative: ± $20.8 USD
In other hand, if an average EV/EBITDA 8 is set, an EBITDA increases of 10%, a Net Debt reduction of 2% and Shares Outstanding increases of 0%, the potencial price target could be ± $37 USD.
The pros: Strong revenue growth (an increase of 4.7% from the same quarter in 2022. This growth was driven by strong passenger demand, which increased by 6.1% year-over-year), improved profitability (driven by higher revenue and lower costs) and positive outlook.
The cons: Higher fuel prices (could impact the company's profitability in the future), labor shortages (the company is working to address this issue by hiring more employees and offering higher wages, but it could reduce their profits), excessive net debt (bad impact with the current interest rates) and economic uncertainty.
The best analysis is yours!
J. Joel Padilla
https://www.linkedin.com/in/joelpadilla/recent-activity/
https://jjoelpadilla.wixsite.com/jjpl-index
https://jjplindex.blogspot.com/
Copyright: Joel Padilla 2023
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