American Airlines Group Inc. (NASDAQ:AAL) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were in line with expectations, at US$13b, while statutory losses ballooned to US$0.48 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for American Airlines Group  earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for American Airlines Group from 16 analysts is for revenues of US$55.6b in 2024. If met, it would imply a reasonable 4.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 180% to US$2.14. In the lead-up to this report, the analysts had been modelling revenues of US$55.3b and earnings per share (EPS) of US$2.33 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$17.55, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic American Airlines Group analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$12.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that American Airlines Group's revenue growth is expected to slow, with the forecast 6.0% annualised growth rate until the end of 2024 being well below the historical 8.0% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.6% annually. Factoring in the forecast slowdown in growth, it looks like American Airlines Group is forecast to grow at about the same rate as the wider industry.



The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for American Airlines Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$17.55, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple American Airlines Group analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for American Airlines Group (2 are potentially serious!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.