A stark divergence of opinion has emerged among market analysts regarding American Airlines’ prospects. While JPMorgan has significantly raised its price target and forecasts a potential rally exceeding 50%, other research firms are simultaneously cutting their earnings expectations for the carrier. This split highlights the deep uncertainty currently surrounding the airline sector.
Shifting Competitive Landscape
The recent bankruptcy of competitor Spirit Airlines in late August has reshuffled the competitive deck within the U.S. aviation industry. Established carriers like American Airlines are positioned to potentially gain market share from this realignment. JPMorgan’s analysis appears to support this thesis, prompting the firm to boost its price target to $20 from $17 while maintaining its “Overweight” rating on the stock.
However, this bullish stance is countered by a different reality emerging from consensus estimates. The collective forecast for American’s 2025 earnings per share has been reduced by 12.5% over the past month, now standing at $0.42. For the upcoming third quarter, analysts are projecting a loss of $0.26 per share.
Strong Results Amid Growing Skepticism
The airline recently reported a strong second quarter for 2025, achieving record revenue of $14.4 billion with an operating margin of 8%. Its adjusted earnings per share of $0.95 substantially outperformed market expectations.
Should investors sell immediately? Or is it worth buying American?
Despite these solid results, Wall Street’s caution remains palpable. The average price target among other research houses sits in a range of $15 to $17, notably lower than JPMorgan’s $20 projection, even though many maintain a general “Moderate Buy” recommendation.
October Earnings Report Pivotal
All eyes are now fixed on the next quarterly earnings release scheduled for October 23. Investors are awaiting clear signals about whether American Airlines can successfully navigate challenging macroeconomic conditions and capitalize on the new market dynamics created by its competitor’s exit.
Recent technical analysis shows the stock’s RSI indicator briefly touched oversold territory. Market technicians note that a confirmed “double bottom” pattern could provide additional upward momentum for the shares—provided the company’s fundamental performance aligns with such a technical outlook.
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