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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
American Airlines Group Inc. (XNAS:AAL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AAL
Name:
AMERICAN AIRLINES GROUP INC. (XNAS:AAL)
Sector:
292.00M
Industry:
Airlines
CEO:
Mr. William Parker
Total Employees:
123,400
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -30.44% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AMERICAN AIRLINES GROUP INC.(AAL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AIRLINES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
12.99
One Month Price Target:
$13.1
Six Month Price Target :
$13.65
Likely Price in One Year's Time:
Ticker:
$14.3
Likely Trading Range Today Under (Normal Volatility)
$12.89
Price Upper limit ($) :
$13.1
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$11.72
This week:
$10.15
This month :
$7.31
Other Primary facts
Market Cap:
8.59B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
649.85M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
41.1%
-25.22%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$18.89
$16.21
$7.09
$9.77
Medium risk (<10%) entry points
Buy Call
Sell Call
$15.33
Buy Put:
Sell Put:
$14.76
$10.64
$11.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AAL
Sharpe Ratio:
-0.10%
Comparison:
AAL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -81.94% lower than the industry
& is -104.32% lower than the market/S&P 500 average
Average Returns/Yield of
AAL
Daily returns:
0.00%
Weekly returns:
0.02%
Monthly returns:
0.08%
Yearly returns:
-3.24%
Comparison of returns:
Average annual returns/yield (last 3 years) is -130.79% below industry average
Classification:
AAL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.75
Statistical test of Returns:
AAL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.77%
Weekly Volatility:
10.66%
Monthly Volatility:
21.31%
Yearly Volatility:
73.83%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.28%
Volatility in last five trading days has been -73.06% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.78%
Weekly VaR:
-21.88%
Monthly VaR:
-43.75%
How Much Can the price of
AAL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-39%
Worst case (decline):
>85%
This translates to price declining to:
$7.97
This translates to price declining to:
$1.95
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
AAL is a 208.81% riskier investment compared to the market/S&P 500 & is 164.56% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 13.46% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AAL
Beta in relation to market/S&P 500--1.50
Expected beta in 1 year's time:
1.02
Expected beta in 3 year's time:
1.443
Unlevered (debt free) Beta:
-0.434
Beta in relation to Nasdaq (XNAS):
1.009
Beta in relation to all global stocks::
0.89
Beta Comparison & Analysis
Beta of competitors/peers::
1.426
Beta is 5.38% higher than peers
Average Industry Beta:
1.438
Beta is 4.52% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.23%
Sustainable growth rate is 70.38% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.124
Alpha is -23.35% below industry average alpha yield
Alpha is -792% below the market average
Analysis of Cost of Capital of
AAL
Equity cost of capital:
0.134
Equity cost of capital is 3.42% above industry mean WACC
Unlevered (without debt) cost of capital:
-3.88%
Before-tax cost of debt:
4.10%
After-tax cost of debt:
3.24%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.24%
WACC is -24.05% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$53.51
Revenue growth rate per share of (3Y):
-1.15
Annual revenue growth rate is 33.88% above the industry average
EPS:
-$3.67
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.65
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 42.86% higher than the industry
Debt per share
$64.91
EBITDA per share
-$1.80
Valuation Analysis Today of
AAL
P/E Ratio:
3.32
P/E Ratio of Competitors/Peers:
21.14
P/E ratio is -84.30% lower than main peers & is -89.55% lower than the industry
-
AAL is -111.14% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $9.70
Present value of the expected future dividends only: $1.49
P/S (Price to Sales ratio):
0.24
Price to sales ratio is -77.13% below the industry mean
P/B (Price to book value ratio):
-1.15
Price to free cash flow: 20.13
Price to free cash flow ratio is 11.56% higher than the industry
Net income growth rate (3Y):
-235.41%
Net income growth rate is 107.79% higher than the average industry net income growth rate
Dividend Analysis
-
Dividend yeild: 1.54%
Previous Dividend: $0.10
Previous adjusted dividend: $0.10
Previous Dividend: $0.20
-
-
Average dividend payment (long-term): $0.10
Average dividend increase/decrease (growth rate) % per period: 0.00%
-
-
-
Previous dividend payment date: 19/02/2020
Previous dividend record date: 02/05/2020
Previous dividend declaration date: 22/01/2020
Dividend History:
2020-02-04--$0.10
--$0.00
--$0.00
2019-11-05--$0.10
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-574.67%
Net debt to equity ratio:
-625.40%
Debt to assets ratio:
63.46%
Net debt to assets ratio:
69.06%
Debt-to-asset ratio is -3.94% below industry average
Ability to repay debt:
Interest coverage ratio:
-0.62
Interest coverage ratio is -138.04% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in previous year: 14.83%
Analysis of Key Statistics
Correlation of price movement with the market:
0.474
Statistical significance of correlation:
AAL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.536
Stock price is -11.59% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.536
Correlation of price movement with Nasdaq (^IXIC):
0.03
Covariance of price movement with the market:
0.083
Kurtosis
13.97
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.477
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
AAL
Gross Profit Margin Ratio:
25%
Operating Profit Margin Ratio:
-4.22%
Operating profit margin is 3707.53% higher than the industry
Net Profit Margin Ratio:
25%
Effective Tax Rate:
22.31%
Effective tax rate is -8.73% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
32.41%
Return on equity (ROE) is -5080.73% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-3.58%
Return on assets (ROA) is -3523.49% lower than the industry
Financial Leverage:
2.7x
Current Ratio:
0.91
Current ratio is -25.58% below industry average
Cash Conversion Cycle (days):
2.1
Cash conversion cycle is -95.81% below industry average
The remaining useful life of property plant & equipment is: 1.3 years
Stock based compensation to net income ratio:
-4.12%
In-depth Efficiency Analysis
Revenue generated per employee:
281.8K
Each employee generates -9% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 9.5K
Each employee generates -150% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 19.3K
Each employee generates 328% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.4K
Each employee generates -14% less free cash flow than industry average revenue per employee
Assets/Capital per employee
398.1K
Each employee generates -14% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AAL
HERTZ GLOBAL HOLDINGS, INC. (XNAS:HTZ)
AMERCO (XNAS:UHAL)
CARSALES.COM LIMITED (XASX:CAR)
THE MIDDLEBY CORPORATION (XNAS:MIDD)
C.H. ROBINSON WORLDWIDE, INC. (XNAS:CHRW)
PLUG POWER INC. (XNAS:PLUG)
RILYI
AXON ENTERPRISE, INC. (XNAS:AXON)
BUILDERS FIRSTSOURCE, INC. (XNYS:BLDR)
Current Analyst Ratings
Strong buy�17%
Buy�21%
Hold�29%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
34.77B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
32.54B
2.23B
-
-
1.28B
1.28B
4.55B
5.83B
23.00M
1.89B
-
- 1169000.00K
- 1467000.00K
- 2379000.00K
- 3062000.00K
- 683000.00K
- 2379000.00K
Statement of Cash Flow
Date:
Period:
2.34B
Differed Income Tax :
- 555000.00K
Stock Based Compensation :
98.00M
Change in Working Capital :
1.04B
Accounts Receivables:
-
Other Working Capital:
- 168000.00K
Other Non-Cash Items:
- 222000.00K
Net Cash Provided by Operating Activities:
704.00M
Investments in PP&E:
- 204000.00K
Net Acquisitions:
- 23000.00K
Purchases of Investments:
- 19454000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2021
FY
273.00M
12.16B
12.43B
1.51B
1.80B
1.61B
17.34B
37.39B
4.09B
1.99B
-
3.56B
2.11B
49.13B
-
66.47B
1.77B
4.00B
-
8.98B
4.26B
19.01B
42.18B
6.38B
54.80B
-
73.81B
6.00M
- 8638000.00K
- 5942000.0K
-
December 31, 2021 at 12:00:00 AM
38.37B
- 7340000.00K
66.47B
-
46.18B
45.9B
13.92B
- 225000.00K
- 5983000.00K
- 7343000.00K
460.00M
- 18000.00K
-
12.19B
5.29B
-
9.00M
408.00M
399.00M
704.00M
- 412000.00K
292.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
AAL
2023
2024
2025
2026
2027
$14.34
$15.79
$17.39
$19.15
$21.08