American Airlines Stock: Still a Value Trap
Last Thursday, American Airlines (NASDAQ: AAL) confirmed that it returned to profitability in the second quarter. The airline also projected that it will earn another profit in the third quarter and said its plan to reduce total debt by $15 billion by 2025 is on track.
Nevertheless, American Airlines shares fell 10% over the following two trading days. This pullback isn't a good buying opportunity, though. Between the company's enormous debt load and its weak profitability, American Airlines stock still looks like a value trap.
Earlier this month, American Airlines said that revenue increased about 12% compared to Q2 2019 last quarter, even though the carrier operated at 8.5% less capacity. The company also projected that non-fuel unit costs had increased 12% over the same period and fuel costs would average between $4.00 and $4.05 per gallon.
Source Fool.com
