Should you buy American Airlines (AAL) stock?

With the stock price falling 15% this year, American Airlines market capitalization has declined to $7.6 billion, implying a very high debt to equity ratio of over 500%. While AAL stock is facing some headwinds, it is helpful to see how American Airlines’ peers fare on metrics that matter.

Why did American Airlines stock fall 13%?

The stock price of American Airlines (NASDAQ: AAL) saw a 13% fall on Wednesday, May 29 after it cut its second quarter outlook and the company’s management admitted to losing business travel to rival airlines. In contrast, United Airlines stock (NASDAQ NASDAQ 0.0%: UAL) was up 2% the same day.

Does AAL stock underperform the S&P 500?

Notably, AAL stock has underperformed the broader market in each of the last 3 years. Returns for the stock were 14% in 2021, -29% in 2022, and 8% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 — indicating that AAL underperformed the S&P in 2021, 2022, and 2023.