American Airlines (NYSE: AAL) is at $17.60 with a market cap standing at $10.5 billion in 2019 and revenue being $45 billion.
At this moment, purchasing the stock of airlines might seem appealing due to the gradual awakening and recovery process following the COVID-19 pandemic. Additionally, the vaccine is soon approaching.
The big profits are incoming for small players, but is AAL stock a real deal?
The market cap of AAL was half the revenue before the start of the pandemic. The 2020 revenue might be standing at $13.3 billion if this quarterly revenue meets $4.2 billion.
AAL Stock Is Bad News
Despite the aid from the government, AAL must gear up to meet the massive debts during December.
The debt of long-term stands to be $29.6 billion which surged from a $20.9 billion debt during the beginning of 2020. In September, American had cash worth $8.7 billion and expending $44 million each day in the previous quarter.
The impacts of the pandemic are still raging, especially, on the travel industry. AAL’s most profitable flight is Boeing, yet, they are discounting the change charges and offering gifts to regular passengers.
Yet, speculators are against the purchase of the stock of American Airlines. Out of 13, only 3 have sold the United Airlines (NYSE: UAL). On the other side, Southwest Air (NYSE: LUV) and Delta Airlines (NYSE: DAL) are being considered as moderate-buy options.
The concern is things will take time to return to normal. As a result, Americans will continuously lose money during 2021. The previous 3 months’ loss was $2.30 EPS and now it has become $5.39 EPS.