American Airlines shares fall the most in a week on Thursday, air carrier revises down its unit revenue estimate for Q4

Yesterday American Airlines Group (AAL) revised down its unit revenue forecast for the fourth quarter, which brought about concerns that demand for air travel in the United States may have already been affected by decelerating global economic growth as well as trade frictions between Beijing and Washington.

American Airlines shares closed lower for the fifth time in the past eleven trading sessions on NASDAQ on Thursday. It has also been the steepest daily loss since January 3rd. The stock went down 4.13% ($1.38) to $32.04, after touching an intraday low at $29.79, or a price level not seen since January 3rd ($28.81).

Shares of American Airlines Group have retreated 0.22% so far in 2019 compared with a 3.58% gain for the benchmark index, S&P 500 (SPX).

In 2018, American Airlines’ stock dropped 38.29%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Currently, the airline forecasts about 1.5% growth in its unit revenue during the fourth quarter. Previously, American Airlines Group expected growth of between 1.5% and 3.5% in unit revenue, a metric which reflects the relation between sales and flight capacity.

Additionally, the air carrier revised down its full-year earnings forecast to a range of $4.40 to $4.60 per share, from a range of $4.50 to $5.00 per share, as expected previously. In comparison, analysts on average expect full-year earnings of $4.62 per share.

Last week Delta Air Lines Inc also lowered its unit revenue forecast for the fourth quarter.

According to CNN Money, the 19 analysts, offering 12-month forecasts regarding American Airlines Group’s stock price, have a median target of $47.00, with a high estimate of $70.00 and a low estimate of $37.00. The median estimate represents a 46.69% upside compared to the closing price of $32.04 on January 10th.

The same media also reported that 12 out of 21 surveyed investment analysts had rated American Airlines Group’s stock as “Buy”, while 5 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for American Airlines Group (AAL) are presented as follows:

Central Pivot Point – $31.17
R1 – $33.52
R2 – $35.01
R3 – $37.36
R4 – $39.72

S1 – $29.68
S2 – $27.33
S3 – $25.84
S4 – $24.36