AAL Long GameSpikes in American Airlines have been pretty common over the last the past six months. With sudden spikes to the stock over $18 or within that target price range. As of recently, the stock beat their estimates by $0.25. However, due to COVID-19, the stock will see very neutral trends and even bear trends. In 2019, American Airlines revenue was at $47.7B which was sharply taken away from the pandemic with a revenue of only $17.34B in 2020. As of recently, American Airlines warned employees they should brace for another wave of furloughs. The Center for Disease Control recently updated their guidelines when people are using public transportation to wear the appropriate attire to prevent the spread of COVID-19.
While the public's use of airlines has decreased over the past year people are still using the airline. Currently, it is hard to determine if the updated regulations on people traveling will improve revenue and make travelers feel safer when they travel.
This should not scare the buyers or the bulls away.
Will it take some time for NASDAQ:AAL to recover? Yes, it will take close to a year if not longer to recover. Despite a long recovery time the stock is still undervalued.
It's hard to estimate when there will the "pre-COVID" stock price but eventually the company can get there.
Long will be the best strategic outcome for this stock because of its necessity to people who travel for work or vacations. While it looks like there are no future plans of government action to be taken on airlines and transportation (again) it should not be surprising. Especially, if such action were to be taken up late spring/early summer. For the time being, it is quite frankly just a long waiting game.
References:
"American Airline Jobs." (Reuters). www.reuters.com
"Requires Face Masks." Center for Disease Control. www.cdc.gov
