As of May 22, 2025, American Airlines Group Inc has a Discounted Cash Flow (DCF) derived fair value of $16.88 per share. With the current market price at $11.24, this represents a potential upside of 50.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $12.39 |
| DCF Fair Value (10-year) | $16.88 |
| Potential Upside (5-year) | 10.2% |
| Potential Upside (10-year) | 50.1% |
| Discount Rate (WACC) | 5.5% - 8.6% |
Revenue is projected to grow from $54211 million in 12-2024 to $80287 million by 12-2034, representing a compound annual growth rate of approximately 4.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 54211 | 3% |
| 12-2025 | 54129 | 0% |
| 12-2026 | 57202 | 6% |
| 12-2027 | 58490 | 2% |
| 12-2028 | 59660 | 2% |
| 12-2029 | 60853 | 2% |
| 12-2030 | 63417 | 4% |
| 12-2031 | 66317 | 5% |
| 12-2032 | 70774 | 7% |
| 12-2033 | 74290 | 5% |
| 12-2034 | 80287 | 8% |
Net profit margin is expected to improve from 2% in 12-2024 to 2% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 846 | 2% |
| 12-2025 | 845 | 2% |
| 12-2026 | 893 | 2% |
| 12-2027 | 913 | 2% |
| 12-2028 | 931 | 2% |
| 12-2029 | 950 | 2% |
| 12-2030 | 990 | 2% |
| 12-2031 | 1035 | 2% |
| 12-2032 | 1105 | 2% |
| 12-2033 | 1160 | 2% |
| 12-2034 | 1253 | 2% |
with a 5-year average of $2111 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 2336 |
| 12-2026 | 2905 |
| 12-2027 | 2990 |
| 12-2028 | 3150 |
| 12-2029 | 3307 |
| 12-2030 | 3413 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 14 |
| Days Inventory | 44 |
| Days Payables | 42 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 3762 | 231 | 2312 | 58 | 1162 |
| 2026 | 5737 | 325 | 3258 | 51 | 2104 |
| 2027 | 5886 | 332 | 3331 | 77 | 2146 |
| 2028 | 6104 | 339 | 3397 | 58 | 2309 |
| 2029 | 6320 | 346 | 3465 | 33 | 2475 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 12.39 | 10.2% |
| 10-Year DCF (Growth) | 16.88 | 50.1% |
| 5-Year DCF (EBITDA) | 8.60 | -23.5% |
| 10-Year DCF (EBITDA) | 16.11 | 43.4% |
Is American Airlines Group Inc (AAL) a buy or a sell? American Airlines Group Inc is definitely a buy. Based on our DCF analysis, American Airlines Group Inc (AAL) appears to be significantly undervalued with upside potential of 50.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $11.24.