Boston, MA 06/13/2014 (wallstreetpr) – American Airlines Group Inc (NASDAQ:AAL) has been on a surge-spree throughout the last month, powered by sumptuous quarterly gains in Q1-2014, but June 12 evolved as a day of debacle! The company witnessed maximum trade activities yesterday, as thousands of volumes of shares were traded upon! AAL plodded through a period of pitfall, plummeting down to 38.91, however, recovering to 40.20 as trade closed.
Why Did AAL Drop?
The primary reason behind vigorous trade activity is the substantial rise in the crude oil prices, after violence in Iraq. A surge in crude oil prices has directly led to increasing aircraft-fuel prices, lowering AAL’s gross earnings. This has leveraged the cynical concerns of the investors, ushering sumptuous trade activities, followed by an abominable slide!
A Robust Q1
In the perspective of the investors, it must be reckoned that AAL announced net EPS of $0.54 in the last concluded quarter, beating its consensus by a margin of $0.06. The company also assumed $10 billion bucks as revenues, increasing by a whopping margin of 63.4% in a YOY basis.
This clearly projects that the company has the competence to outwit its competitors with exquisite upbeat financial estimates and significant strategies. Hence, it might be an early call to consider AAL’s growth model or economic policies, mergers and expansion strategies as non-fitting!
Analysts’ Reviews
In May 2014, Analyst teams of JPMorgan Chase & Co. (NYSE:JPM) and Goldman Sachs Group Inc (NYSE:GS) had estimated a rise in AAL’s share price in Q2-2014 till $55.00 and $50.00 respectively, keeping a multitude of factors in mind. This worked with a myriad of investors, who took the stock up and helped it cross the 40.00 mark, later in the day.
AAL Brainchilds The US’ First ‘Direct-Asia’ Flight
AAL has announced on June 11 that it flagged off daily non-stop commuter flights between Dallas/Fort Worth airports and Hong Kong/Shanghai airports. This service is deemed to be operated with a flamboyant Boeing 777-300ER.
This move is of strategic importance because this consumer-based operation shall deploy flights emanating from the US to directly land at Asia, for the first time in history! Certainly, this will have a direct impact in swelling AAL’s exchequer in the days to come.
