American Airlines Stock Stalls Ahead of Earnings

AAL is on track for its worst single-session decline since June 2022

Deputy Editor
Apr 12, 2023 at 1:01 PM
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American Airlines Group Inc (NASDAQ:AAL) is off by 9% to trade at $13.03 today, after the company slashed its first-quarter profit outlook ahead of earnings. American said it anticipates earnings per share to land between one and five cents, as higher costs provide headwinds. The airline giant will step into the earnings confessional before the market open on Wednesday, April 19.

Options traders are responding in kind, with 101,000 calls and 95,000 puts traded so far today -- volume that's triple the average intraday amount. Most popular is the May 14 call, while new positions are being opened at the weekly 4/14 13.50-strike call.

This uptick in bullish volume is a change from what the equity has seen over the past two weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), American Airlines stock carries a 10-day put/call volume ratio of 1.78 that sits higher than all other readings from the past year.

Over the past eight quarters, the stock has logged post-earnings moves to the downside five times, though it did jump slightly following its January report. On average, AAL averages a 3.5% move --regardless of direction -- the day after earnings over the past two years.

Now on track to snap a three-day win streak, the shares are heading for their worst single-session decline since June 2022, and their lowest close since Jan. 4. And while AAL is holding onto its year-to-date breakeven level, the stock remains off by more than 24% over the last 12 months. 

AAL Chart April 122023


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