Raymond James Thinks American Airlines Can Soar 38% Based on ONE Data Point

The last time we thought about American Airlines there were grounded flights, tempers flaring, and Aunt Karen’s in droves (yes, really) stranded at O’Hare with only a Cinnabon for emotional support. Well, apparently, none of that matters anymore. 

Raymond James just upgraded American Airlines’ stock, saying it could soar 38% in 2025. That’s quite the optimistic prediction for an airline that gave us Home Alone vibes at every major airport on Christmas Eve.

So, what’s got Raymond James analysts Savanthi Syth and Carter Eades ready to slap a $24 price target on AAL? 

Well, American recently upgraded its Q4 guidance for revenue per available seat mile (RASM)... the airline industry’s favorite nerdy metric. Instead of a grim decline, American now expects flat to slightly positive growth, which, in the world of airline earnings, is basically a standing ovation. 

Analysts also pointed out American’s improved engagement with corporate customers. So, they’re pretty much wooing suit-and-tie travelers who expense everything and complain less about middle seats.

Add to that a new 10-year, co-branded credit card deal with Citigroup. This partnership is expected to pour cash into American’s checking account, with compensation growing by 10% annually. By 2030, this setup could contribute an extra $1.5 billion to pretax income. That’s a lot of free pretzels and ginger ales.

While the airline industry is probably one of the worst in existence, American is positioned better than you might think. The analysts highlighted a favorable domestic setup, with airlines adjusting capacity to right-size supply. This just means: fewer empty seats, more profits. Even better, premium seating… think first class and extra legroom continues to grow. By 2024, those fancy seats will make up 36% of the market, compared to 28% in 2019.

And don’t forget American’s stronghold in Central and South America. With the dollar flexing its biceps internationally, this region is quickly becoming a goldmine for American.

Raymond James also gave shoutouts to Alaska Air, Allegiant, and JetBlue, labeling them as best positioned heading into earnings season. But American got the biggest upgrade, which might just be the analysts’ way of saying, “We forgive you for the Holiday disaster… kinda.”

American’s stock is already up 26% this year, outpacing the S&P 500 (+25%) and trailing only slightly behind the U.S. Global JETS ETF (+34%). That’s pretty impressive for being in an industry with worse profit margins than our government.

But whether American can climb another 38% depends on the company delivering on those corporate travel gains, keeping costs down, and praying to the IT gods for no more nationwide meltdowns.

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Stock.News has positions in American Airlines, Alaska Air, Citigroup, Allegiant, and JetBlue mentioned in article.