Intrinsic value of American Airlines Group, Inc. - AAL

Previous Close

$25.79

  Intrinsic Value

$40.23

stock screener

  Rating & Target

str. buy

+56%

Previous close

$25.79

 
Intrinsic value

$40.23

 
Up/down potential

+56%

 
Rating

str. buy

We calculate the intrinsic value of AAL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.10
  3.29
  3.46
  3.61
  3.75
  3.88
  3.99
  4.09
  4.18
  4.26
  4.34
  4.40
  4.46
  4.52
  4.57
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
Revenue, $m
  45,922
  47,433
  49,074
  50,848
  52,757
  54,803
  56,989
  59,321
  61,802
  64,437
  67,232
  70,193
  73,326
  76,638
  80,137
  83,830
  87,726
  91,835
  96,165
  100,726
  105,530
  110,587
  115,909
  121,509
  127,401
  133,597
  140,113
  146,964
  154,166
  161,736
Variable operating expenses, $m
  41,241
  42,456
  43,776
  45,202
  46,736
  48,381
  50,139
  52,013
  54,008
  56,126
  54,048
  56,428
  58,947
  61,609
  64,422
  67,391
  70,523
  73,826
  77,307
  80,974
  84,835
  88,901
  93,179
  97,682
  102,418
  107,399
  112,637
  118,144
  123,934
  130,020
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  41,241
  42,456
  43,776
  45,202
  46,736
  48,381
  50,139
  52,013
  54,008
  56,126
  54,048
  56,428
  58,947
  61,609
  64,422
  67,391
  70,523
  73,826
  77,307
  80,974
  84,835
  88,901
  93,179
  97,682
  102,418
  107,399
  112,637
  118,144
  123,934
  130,020
Operating income, $m
  4,680
  4,977
  5,299
  5,646
  6,021
  6,422
  6,851
  7,308
  7,794
  8,311
  13,184
  13,765
  14,379
  15,029
  15,715
  16,439
  17,203
  18,009
  18,858
  19,752
  20,694
  21,686
  22,730
  23,828
  24,983
  26,198
  27,476
  28,819
  30,232
  31,716
EBITDA, $m
  11,078
  11,443
  11,839
  12,267
  12,727
  13,221
  13,748
  14,311
  14,909
  15,545
  16,219
  16,934
  17,689
  18,488
  19,332
  20,223
  21,163
  22,155
  23,199
  24,300
  25,458
  26,678
  27,962
  29,313
  30,735
  32,229
  33,801
  35,454
  37,191
  39,018
Interest expense (income), $m
  867
  1,838
  1,594
  1,693
  1,802
  1,919
  2,046
  2,181
  2,325
  2,480
  2,644
  2,818
  3,003
  3,198
  3,406
  3,625
  3,856
  4,100
  4,358
  4,629
  4,916
  5,217
  5,535
  5,869
  6,221
  6,592
  6,981
  7,391
  7,822
  8,275
  8,751
Earnings before tax, $m
  2,843
  3,383
  3,605
  3,844
  4,101
  4,376
  4,670
  4,983
  5,315
  5,668
  10,366
  10,762
  11,181
  11,623
  12,090
  12,583
  13,103
  13,651
  14,228
  14,837
  15,477
  16,151
  16,860
  17,607
  18,392
  19,217
  20,085
  20,998
  21,957
  22,965
Tax expense, $m
  768
  913
  973
  1,038
  1,107
  1,182
  1,261
  1,345
  1,435
  1,530
  2,799
  2,906
  3,019
  3,138
  3,264
  3,397
  3,538
  3,686
  3,842
  4,006
  4,179
  4,361
  4,552
  4,754
  4,966
  5,189
  5,423
  5,669
  5,928
  6,201
Net income, $m
  2,075
  2,470
  2,632
  2,806
  2,994
  3,195
  3,409
  3,637
  3,880
  4,137
  7,567
  7,856
  8,162
  8,485
  8,826
  9,186
  9,565
  9,965
  10,387
  10,831
  11,298
  11,790
  12,308
  12,853
  13,426
  14,028
  14,662
  15,328
  16,029
  16,765

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  62,479
  64,534
  66,768
  69,181
  71,778
  74,562
  77,537
  80,709
  84,084
  87,670
  91,472
  95,500
  99,763
  104,269
  109,030
  114,055
  119,356
  124,945
  130,836
  137,042
  143,578
  150,458
  157,700
  165,319
  173,334
  181,765
  190,630
  199,951
  209,749
  220,049
Adjusted assets (=assets-cash), $m
  62,479
  64,534
  66,768
  69,181
  71,778
  74,562
  77,537
  80,709
  84,084
  87,670
  91,472
  95,500
  99,763
  104,269
  109,030
  114,055
  119,356
  124,945
  130,836
  137,042
  143,578
  150,458
  157,700
  165,319
  173,334
  181,765
  190,630
  199,951
  209,749
  220,049
Revenue / Adjusted assets
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
Average production assets, $m
  43,121
  44,539
  46,081
  47,746
  49,539
  51,460
  53,513
  55,702
  58,032
  60,506
  63,131
  65,911
  68,853
  71,963
  75,248
  78,716
  82,375
  86,233
  90,299
  94,582
  99,092
  103,841
  108,839
  114,097
  119,629
  125,448
  131,566
  137,999
  144,762
  151,870
Working capital, $m
  -9,735
  -10,056
  -10,404
  -10,780
  -11,184
  -11,618
  -12,082
  -12,576
  -13,102
  -13,661
  -14,253
  -14,881
  -15,545
  -16,247
  -16,989
  -17,772
  -18,598
  -19,469
  -20,387
  -21,354
  -22,372
  -23,444
  -24,573
  -25,760
  -27,009
  -28,323
  -29,704
  -31,156
  -32,683
  -34,288
Total debt, $m
  29,511
  31,361
  33,371
  35,543
  37,880
  40,385
  43,063
  45,918
  48,956
  52,183
  55,605
  59,230
  63,067
  67,122
  71,407
  75,929
  80,700
  85,731
  91,033
  96,618
  102,500
  108,692
  115,210
  122,067
  129,281
  136,868
  144,847
  153,236
  162,054
  171,324
Total liabilities, $m
  56,231
  58,081
  60,091
  62,263
  64,600
  67,105
  69,783
  72,638
  75,676
  78,903
  82,325
  85,950
  89,787
  93,842
  98,127
  102,649
  107,420
  112,451
  117,753
  123,338
  129,220
  135,412
  141,930
  148,787
  156,001
  163,588
  171,567
  179,956
  188,774
  198,044
Total equity, $m
  6,248
  6,453
  6,677
  6,918
  7,178
  7,456
  7,754
  8,071
  8,408
  8,767
  9,147
  9,550
  9,976
  10,427
  10,903
  11,405
  11,936
  12,495
  13,084
  13,704
  14,358
  15,046
  15,770
  16,532
  17,333
  18,176
  19,063
  19,995
  20,975
  22,005
Total liabilities and equity, $m
  62,479
  64,534
  66,768
  69,181
  71,778
  74,561
  77,537
  80,709
  84,084
  87,670
  91,472
  95,500
  99,763
  104,269
  109,030
  114,054
  119,356
  124,946
  130,837
  137,042
  143,578
  150,458
  157,700
  165,319
  173,334
  181,764
  190,630
  199,951
  209,749
  220,049
Debt-to-equity ratio
  4.720
  4.860
  5.000
  5.140
  5.280
  5.420
  5.550
  5.690
  5.820
  5.950
  6.080
  6.200
  6.320
  6.440
  6.550
  6.660
  6.760
  6.860
  6.960
  7.050
  7.140
  7.220
  7.310
  7.380
  7.460
  7.530
  7.600
  7.660
  7.730
  7.790
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,075
  2,470
  2,632
  2,806
  2,994
  3,195
  3,409
  3,637
  3,880
  4,137
  7,567
  7,856
  8,162
  8,485
  8,826
  9,186
  9,565
  9,965
  10,387
  10,831
  11,298
  11,790
  12,308
  12,853
  13,426
  14,028
  14,662
  15,328
  16,029
  16,765
Depreciation, amort., depletion, $m
  6,398
  6,466
  6,540
  6,620
  6,707
  6,799
  6,898
  7,003
  7,115
  7,234
  3,035
  3,169
  3,310
  3,460
  3,618
  3,784
  3,960
  4,146
  4,341
  4,547
  4,764
  4,992
  5,233
  5,485
  5,751
  6,031
  6,325
  6,635
  6,960
  7,301
Funds from operations, $m
  8,473
  8,936
  9,172
  9,427
  9,701
  9,994
  10,307
  10,640
  10,995
  11,371
  10,603
  11,025
  11,472
  11,945
  12,444
  12,970
  13,525
  14,111
  14,728
  15,378
  16,062
  16,783
  17,541
  18,338
  19,177
  20,060
  20,987
  21,963
  22,988
  24,066
Change in working capital, $m
  -293
  -320
  -348
  -376
  -405
  -434
  -464
  -494
  -526
  -559
  -593
  -628
  -664
  -702
  -742
  -783
  -826
  -871
  -918
  -967
  -1,018
  -1,072
  -1,128
  -1,187
  -1,249
  -1,314
  -1,381
  -1,452
  -1,527
  -1,605
Cash from operations, $m
  8,766
  9,256
  9,520
  9,803
  10,105
  10,427
  10,770
  11,134
  11,521
  11,930
  11,195
  11,653
  12,136
  12,647
  13,185
  13,753
  14,352
  14,982
  15,646
  16,345
  17,081
  17,855
  18,669
  19,526
  20,426
  21,373
  22,369
  23,415
  24,515
  25,671
Maintenance CAPEX, $m
  -2,011
  -2,073
  -2,141
  -2,215
  -2,296
  -2,382
  -2,474
  -2,573
  -2,678
  -2,790
  -2,909
  -3,035
  -3,169
  -3,310
  -3,460
  -3,618
  -3,784
  -3,960
  -4,146
  -4,341
  -4,547
  -4,764
  -4,992
  -5,233
  -5,485
  -5,751
  -6,031
  -6,325
  -6,635
  -6,960
New CAPEX, $m
  -1,288
  -1,419
  -1,542
  -1,666
  -1,792
  -1,921
  -2,053
  -2,189
  -2,330
  -2,474
  -2,624
  -2,780
  -2,942
  -3,110
  -3,285
  -3,468
  -3,659
  -3,858
  -4,066
  -4,283
  -4,511
  -4,749
  -4,998
  -5,259
  -5,532
  -5,818
  -6,118
  -6,433
  -6,763
  -7,109
Cash from investing activities, $m
  -3,299
  -3,492
  -3,683
  -3,881
  -4,088
  -4,303
  -4,527
  -4,762
  -5,008
  -5,264
  -5,533
  -5,815
  -6,111
  -6,420
  -6,745
  -7,086
  -7,443
  -7,818
  -8,212
  -8,624
  -9,058
  -9,513
  -9,990
  -10,492
  -11,017
  -11,569
  -12,149
  -12,758
  -13,398
  -14,069
Free cash flow, $m
  5,467
  5,764
  5,837
  5,922
  6,018
  6,125
  6,243
  6,372
  6,513
  6,665
  5,662
  5,838
  6,026
  6,226
  6,440
  6,667
  6,908
  7,164
  7,434
  7,720
  8,023
  8,342
  8,679
  9,034
  9,409
  9,804
  10,219
  10,657
  11,118
  11,603
Issuance/(repayment) of debt, $m
  -4,518
  1,850
  2,010
  2,172
  2,337
  2,505
  2,678
  2,855
  3,038
  3,227
  3,422
  3,625
  3,836
  4,056
  4,284
  4,522
  4,771
  5,031
  5,302
  5,585
  5,882
  6,192
  6,517
  6,857
  7,214
  7,587
  7,979
  8,389
  8,819
  9,270
Issuance/(repurchase) of shares, $m
  4,342
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -176
  1,850
  2,010
  2,172
  2,337
  2,505
  2,678
  2,855
  3,038
  3,227
  3,422
  3,625
  3,836
  4,056
  4,284
  4,522
  4,771
  5,031
  5,302
  5,585
  5,882
  6,192
  6,517
  6,857
  7,214
  7,587
  7,979
  8,389
  8,819
  9,270
Total cash flow (excl. dividends), $m
  5,291
  7,614
  7,847
  8,094
  8,355
  8,630
  8,921
  9,227
  9,551
  9,892
  9,084
  9,463
  9,862
  10,282
  10,724
  11,190
  11,679
  12,195
  12,736
  13,306
  13,905
  14,534
  15,196
  15,892
  16,623
  17,391
  18,198
  19,046
  19,937
  20,873
Retained Cash Flow (-), $m
  -6,417
  -206
  -223
  -241
  -260
  -278
  -298
  -317
  -338
  -359
  -380
  -403
  -426
  -451
  -476
  -502
  -530
  -559
  -589
  -621
  -654
  -688
  -724
  -762
  -802
  -843
  -887
  -932
  -980
  -1,030
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,126
  7,409
  7,624
  7,853
  8,095
  8,351
  8,623
  8,910
  9,213
  9,534
  8,704
  9,060
  9,436
  9,831
  10,248
  10,687
  11,149
  11,636
  12,147
  12,685
  13,251
  13,846
  14,472
  15,130
  15,821
  16,548
  17,311
  18,114
  18,957
  19,843
Discount rate, %
  12.20
  12.81
  13.45
  14.12
  14.83
  15.57
  16.35
  17.17
  18.02
  18.93
  19.87
  20.87
  21.91
  23.00
  24.16
  25.36
  26.63
  27.96
  29.36
  30.83
  32.37
  33.99
  35.69
  37.47
  39.35
  41.31
  43.38
  45.55
  47.83
  50.22
PV of cash for distribution, $m
  -1,004
  5,822
  5,221
  4,629
  4,055
  3,505
  2,988
  2,509
  2,073
  1,685
  1,185
  932
  718
  542
  399
  287
  201
  137
  91
  59
  37
  22
  13
  7
  4
  2
  1
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

American Airlines Group Inc. is a holding company. The Company's primary business activity is the operation of a network air carrier, providing scheduled air transportation for passengers and cargo. The Company operates through American segment, which provides air transportation for passengers and cargo. The Company's cargo division provides a range of freight and mail services with facilities and interline connections available across the globe. Together with its regional airline subsidiaries and third-party regional carriers operating as American Eagle, its airline operated an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries, principally from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, District of Columbia, as of December 31, 2016. In the fiscal year ended December 31, 2016, approximately 199 million passengers boarded its mainline and regional flights.

FINANCIAL RATIOS  of  American Airlines Group, Inc. (AAL)

Valuation Ratios
P/E Ratio 4.9
Price to Sales 0.3
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 2
Price to Free Cash Flow 16.5
Growth Rates
Sales Growth Rate -2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.8%
Cap. Spend. - 3 Yr. Gr. Rate 13%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 594.2%
Total Debt to Equity 643.2%
Interest Coverage 6
Management Effectiveness
Return On Assets 6.5%
Ret/ On Assets - 3 Yr. Avg. 11.4%
Return On Total Capital 9.8%
Ret/ On T. Cap. - 3 Yr. Avg. 19%
Return On Equity 56.8%
Return On Equity - 3 Yr. Avg. -185.4%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 61.9%
Gross Margin - 3 Yr. Avg. 57.3%
EBITDA Margin 17.4%
EBITDA Margin - 3 Yr. Avg. 15.8%
Operating Margin 13.2%
Oper. Margin - 3 Yr. Avg. 12.7%
Pre-Tax Margin 10.7%
Pre-Tax Margin - 3 Yr. Avg. 9.8%
Net Profit Margin 6.7%
Net Profit Margin - 3 Yr. Avg. 10.7%
Effective Tax Rate 37.8%
Eff/ Tax Rate - 3 Yr. Avg. -5.6%
Payout Ratio 8.4%

AAL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AAL stock intrinsic value calculation we used $44541 million for the last fiscal year's total revenue generated by American Airlines Group, Inc.. The default revenue input number comes from 0001 income statement of American Airlines Group, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AAL stock valuation model: a) initial revenue growth rate of 3.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.2%, whose default value for AAL is calculated based on our internal credit rating of American Airlines Group, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of American Airlines Group, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AAL stock the variable cost ratio is equal to 90.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AAL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for American Airlines Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for American Airlines Group, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AAL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AAL are equal to 93.9%.

Life of production assets of 20.8 years is the average useful life of capital assets used in American Airlines Group, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AAL is equal to -21.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-169 million for American Airlines Group, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 448.934 million for American Airlines Group, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of American Airlines Group, Inc. at the current share price and the inputted number of shares is $11.6 billion.

RELATED COMPANIES Price Int.Val. Rating
UAL United Contine 82.94 257.43  str.buy
ALK Alaska Air Gro 60.36 131.68  str.buy
HA Hawaiian Holdi 24.72 104.49  str.buy
DAL Delta Air Line 58.04 118.29  str.buy
JBLU JetBlue Airway 18.40 24.71  buy
ALGT Allegiant Trav 142.81 144.05  hold
SAVE Spirit Airline 38.40 173.87  str.buy

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.