What took place
Following the company's's release of a first-quarter investor relations update with the Securities and Exchange Commission( SEC ) that contained both good and bad news for investors, shares of American Airlines Group( AAL- 8.97 %) fell 9.4 % through 11 p.m. ET on Wednesday.
Now what?
Good news second: In Q1, American Airlines flew 65 billion" whole around stand miles"( the sum of all the seats on all of its aircraft by the total number of miles flown by American in the third ). That number was slightly higher than management's's own projection and up 9.2 % year over year.
Even better, American Airlines charged a high price for these tickets, exceeding the previous guidance's's midpoint with its" complete revenue per available chair miles" of 25.5 %. In a similar vein, the business claims that its adjusted operating profit margin for the third was precisely 3.5 % of information.
The bad news is that American Airlines determined that this quarter's's earnings will range from$ 0.01 to$ 0.05 per share after crunching all those numbers. And compared to Wall Street's's anticipated adjusted profit of$ 0.07 per share, that is significantly less.
Just what?
Simple version: When American Airlines actually reports its Q1 income on April 19, it really warned investors that it would lack scientist targets. Investors aren't happy to hear that. The company will find it more difficult to meet its estimates income of$ 1.86 per have this year due to missing Q1 income.
But this is what long-term investors in this flight store need to pay attention to.
If American Airlines made a profit of$ 1.86 this year, its stock is currently worth 7 times what it was last year. The stock would still appear incredibly cheap at a PE of less than 9, especially given that, according to forecasts from S & ampP Global Market Intelligence, American Airlines is on course to grow those earnings four times over the next four years, even if it doesn't earn quite that much — let's's say it earns only$ 1.50, 20 % below forecast.
I think today's's sell-off in American Airlines store looks like a great opportunity to buy, if you ask me.
