AMERICAN AIRLINES NDQ-AAL RECENT

PRICE 47.85 P/ERATIO 5.1(Trailing:

Median: NMF) P/E RATIO 0.26 YLD 0.8%
10.5 RELATIVE DIV’D VALUE
LINE
TIMELINESS – E High:
Low:
27.2
23.5
54.6
25.1
56.2
45.9
Target Price Range
2018 2019 2020
SAFETY 3 New 11/28/14 LEGENDS
. . . . Relative Price Strength 128
TECHNICAL – E Options: Yes
Shaded area indicates recession 96
BETA NMF (1.00 = Market) 80
2018-20 PROJECTIONS 64
Ann’l Total 48
Price Gain Return 40
High 95 (+100%) 19%
Low 65 (+35%) 9% 32
Insider Decisions 24
J A S O N D J F M
to Buy 0 0 0 0 0 0 0 0 0 16
Options 0 0 1 0 0 0 0 0 2 12
to Sell 0 0 0 0 0 0 0 1 1
% TOT. RETURN 4/15
Institutional Decisions THIS VL ARITH.*
2Q2014 3Q2014 4Q2014 STOCK INDEX
Percent 75 1 yr. 38.9 9.1
to Buy 386 295 335 shares 50
to Sell 189 269 308 3 yr. — 58.8
traded 25
Hld’s(000) 496744 492804 509965 5 yr. — 84.6
In December 2011, AMR Corp., the parent 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 © VALUE LINE PUB. LLC 18-20
company of American Airlines, filed for -- -- -- -- -- -- -- -- - - 61.15 62.95 69.25 Revenues per sh 83.35
Chapter 11 bankruptcy protection. In De- -- -- -- -- -- -- -- -- -- 5.99 11.50 9.65 ‘‘Cash Flow’’ per sh 11.95
cember 2013, it emerged from bankruptcy -- -- -- -- -- -- -- -- -- 3.93 9.35 7.45 Earnings per sh A 10.00
and merged with US Airways Group. The -- -- -- -- -- -- -- -- -- .20 .40 .60 Div’ds Decl’d per sh B 1.00
corporation changed its name to American -- -- -- -- -- -- -- -- - - 50.67 55.00 55.00 Gross Equipment per sh 55.00
Airlines Group and trades on the Nasdaq -- -- -- -- -- -- -- -- -- 2.90 3.70 4.60 Book Value per sh C 7.50
Exchange under the ticker AAL. -- -- -- -- -- -- -- - - 697.47 675.00 650.00 Common Shs Outst’g D 600.00
-- -- -- -- -- -- -- -- -- 9.9 Bold figures are Avg Ann’l P/E Ratio 8.0
-- -- -- -- -- -- -- -- -- .52 Value Line Relative P/E Ratio .50
estimates
CAPITAL STRUCTURE as of 3/31/15 -- -- -- -- -- -- -- -- -- .5% Avg Ann’l Div’d Yield 1.3%
Total Debt $18922 mill. Due in 5 Yrs $6500 mill. -- -- -- -- -- -- -- -- - - 42650 42500 45000 Revenues ($mill) 50000
LT Debt $17638 mill. LT Interest $450 mill. -- -- -- -- -- -- -- -- - - 82.4% 82.5% 82.5% Load Factor 83.0%
(86% of Cap’l) -- -- -- -- -- -- -- - - 13.0% 28.0% 20.0% Operating Margin 22.0%
Leases, Uncapitalized Annual Rentals $1.7 bill. -- -- -- -- -- -- -- -- -- 1295 2000 2500 Depreciation ($mill) 3500
-- -- -- -- -- -- -- -- -- 2882 6300 4850 Net Profit ($mill) 6000
Pension Assets-12/14 $10.9 bill. -- -- -- -- -- -- -- -- - - 10.3% 35.0% 35.0% Income Tax Rate 35.0%
Oblig. $17.6 bill. -- -- -- -- -- -- -- -- -- 6.8% 15.0% 10.5% Net Profit Margin 12.0%
Pfd. Stock None
-- -- -- -- -- -- -- -- - - 16196 16750 16000 Long-Term Debt ($mill) 18000
Common Stock 692,798,851 shs. -- -- -- -- -- -- -- -- - - 2021.0 2500 3000 Shr. Equity ($mill) 4500
as of 4/17/15 -- -- -- -- -- -- -- -- - - 15.8% 32.5% 25.5% Return on Total Cap’l 26.5%
-- -- -- -- -- -- -- -- -- NMF NMF NMF Return on Shr. Equity NMF
MARKET CAP: $33.2 billion (Large Cap) -- -- -- -- -- -- -- -- -- NMF NMF NMF Retained to Com Eq NMF
CURRENT POSITION 2013 2014 3/31/15 -- -- -- -- -- -- -- -- -- 5% 4% 8% All Div’ds to Net Prof 10%
($MILL.)
Cash Assets -- 994 1048 BUSINESS: American Airlines Group (formerly known as AMR facilities and interline connections around the globe. The corpora-
Receivables -- 1771 757 Corp.) can trace its roots back to 1934. The company operates two tion emerged from Chapter 11 bankruptcy protection in December
Inventory (Avg Cost) -- 1004 995
Other -- 8343 11329 airlines: American and US Airways. Its combined fleet en- 2013. Inc.: DE. CEO and Chairman: W. Douglas Parker. Of-
Current Assets - - 12112 14129 compasses approximately 965 aircraft and operates, on average, ficers/directors own less than 1% of common stock; T. Rowe Price,
Accts Payable -- 1377 1587 6,700 daily flights to destinations within 54 countries. American Air- 13.0% (4/15 proxy). Address: 4333 Amon Carter Blvd., Fort Worth,
Debt Due -- 1708 1284 lines is also one of the world’s largest transporters of cargo with TX 76155. Telephone: (817) 963-1234. Internet: www.aa.com
Other - - 10350 11362
Current Liab. - - 13435 14233 American Airlines’ first quarter was a up from around $8 billion at the end of
mixed bag. The company reported earn- last year. The debt-to-equity ratio is still
ANNUAL RATES Past Past Est’d ’12-’14
of change (per sh) 10 Yrs. 5 Yrs. to ’18-’20 ings of $1.30 a share, which was below among the highest within the industry,
Sales -- -- NMF what we had expected, though when you though this doesn’t concern us all that
‘‘Cash Flow’’ -- -- NMF exclude special items, the airline posted much because most of the debt isn’t due
Earnings -- -- NMF share net of $1.73, in line with our es- for several years, and the company has
Dividends -- -- NMF
Book Value -- -- NMF timate. Profits were aided by substantially ample cash to service it.
lower fuel prices, which caused operating Share repurchases remain a priority
Cal- QUARTERLY REVENUES ($ mill.) Full
endar Mar.31 Jun.30 Sep.30 Dec.31 Year expenses to fall 12% year over year, to for management. American Airlines
$8.3 billion. The steep drop in the price of repurchased $190 million in stock during
2012 -- -- -- -- -- crude oil continues to benefit the airline fi- the first quarter, which was a bit surpris-
2013 -- -- -- -- --
2014 9995 11356 11139 10160 42650 nancially, and management reiterated ing given the equity’s recent performance.
2015 9827 11000 11500 10173 42500 that it remains unhedged despite the Management reiterated that it will remain
2016 10000 11500 12500 11000 45000 recent run-up in price. (Although we note opportunistic with capital deployment, and
EARNINGS PER SHARE A that oil is still down more than 40% from we suspect it will be more aggressive in
Cal- Full
endar Mar.31 Jun.30 Sep.30 Dec.31 Year last year’s peak.) the coming quarters with buybacks.
Revenue was hit by a stronger dollar. Meantime, we expect a dividend hike
2012 -- -- -- -- --
2013 -- -- -- -- -- Sales came in at $9.82 billion for the sometime in the latter part of the year.
2014 .66 1.17 1.28 .82 3.93 quarter, down about 2% from last year’s These shares are an opportune selec-
2015 1.30 3.00 3.05 2.00 9.35 tally and slightly below our call for $10 bil- tion for long-term investors. The air-
2016 1.00 2.25 2.45 1.75 7.45 lion. The company cited a stronger U.S. line industry remains one of the best value
QUARTERLY DIVIDENDS PAID B dollar, lower capacity growth, and weak- plays in the stock market, and American
Cal- Full
endar Mar.31 Jun.30 Sep.30 Dec.31 Year ness in the Latin America region as cata- Airlines is attractively valued by any
2011 -- -- -- -- --
lysts for the decline. metric. Consequently, the equity should
2012 -- -- -- -- -- The balance sheet is slowly improv- provide above-average total returns over
2013 -- -- -- -- -- ing. American Airlines had approximately the next few years. Note that the stock
2014 -- -- .10 .10 .20 $9.9 billion in cash and short-term invest- remains unranked for Timeliness, however.
2015 .10 .10 ments when it ended the quarter. That’s Daniel Henigson May 29, 2015
(A) Fully diluted earnings. Next earnings report (C) Includes intangibles. At the end of 2014: bankruptcy (12/13). Company’s Financial Strength B
due late July. $6.3 bill., or $9.08 per share. Stock’s Price Stability NMF
(B) Quarterly dividends expected to be paid (D) In millions. Price Growth Persistence NMF
late February, May, August, and November. (E) Unranked due to emergence from Earnings Predictability NMF
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