Here's Why Investors Should Retain American Airlines Stock Now

American Airlines AAL is benefiting from robust air travel demand. The company’s expansion efforts are encouraging. However, elevated operating expenses and weak liquidity are hurting AAL’s prospects.Factors Favoring AAL American Airlines is rolling out a new software platform to streamline the boarding process. It alerts agents and customers if a passenger boards early, with an easy override for companions in earlier groups. The platform also provides agents with insights into group sizes and flight connection times, improving boarding efficiency and reducing missed connections. By consolidating multiple apps into one, it simplifies tasks for agents. The technology is being expanded to more than 100 airports, including Austin and Atlanta, to enhance operations and customer service.The company's top line is bolstered by strong demand across key revenue segments. In the third quarter of 2024, managed business revenues grew 6% year over year, and premium revenues jumped 8% year over year, with only a 3% capacity increase, highlighting the airline's ability to attract high-value customers. Loyalty revenues also saw a 5% year-over-year rise, with AAdvantage members contributing 72% of premium cabin revenues. The American Airlines AAdvantage program offers personalized travel experiences by allowing members to earn and redeem miles for various rewards and benefits.AAL’s robust expansion efforts are boosting its prospects as it continues to enhance its fleet and infrastructure. In the third quarter of 2024, American Airlines committed to purchasing 14 used Bombardier CRJ 900 aircraft, with deliveries scheduled from 2024 through 2026. This move strengthens AAL’s fleet, allowing the airline to expand its capacity and improve operational efficiency.Owing to such tailwinds, AAL shares have rallied 28.8% quarter to date compared with its industry’s 6.4% growth.Image Source: Zacks Investment ResearchAAL: Key Risks to WatchAmerican Airlines' financial stability is facing pressure due to high expenses and weak liquidity. In the third quarter of 2024, while total operating costs slightly decreased, they remained elevated, largely driven by rising labor expenses. Labor costs, including salaries, wages and benefits, accounted for 30.2% of total operating costs and rose by 3.1% compared to the previous year.Moreover, AAL exited the third quarter of 2024 with a current ratio (a measure of liquidity) of 0.54. A current ratio of less than 1 indicates that the company holds sufficient cash to meet its short-term obligations.AAL’s Zacks RankAAL currently carries a Zacks Rank #3 (Hold).Stocks to ConsiderInvestors interested in the Zacks Transportation sector may consider Westinghouse Air Brake Technologies WAB and SkyWest SKYW.Westinghouse Air Brake Technologies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. WAB has an expected earnings growth rate of 2.01% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 9.46%. Shares of WAB have risen 68.5% in the past year.SkyWest currently sports a Zacks Rank #1. SKYW has an expected earnings growth rate of 4.07% for the current year.The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 79.12%. Shares of SKYW have climbed 128.1% in the past year.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Airlines Group Inc. (AAL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Westinghouse Air Brake Technologies Corporation (WAB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks