Orsted CEO Steps Down After Failing to Turn Around Wind Firm
Mads Nipper will step down as chief executive officer of Danish wind developer Orsted A/S after a series of significant writedowns over the past few years.
Nipper will step down on Feb. 1 and will be replaced by his deputy Rasmus Errboe, the company said Friday. Nipper had been CEO for four years and had been struggling to improve the company's financial performance after a series of setbacks in the US as the cost of building offshore wind farms keeps rising.
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Yahoo
37 minutes ago
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq edge higher amid renewed tariff threats, Boeing stock slumps
US stocks edged higher on Thursday as more data showed milder inflation pressures, even as President Trump renewed his threat to impose "take it or leave it" tariffs on trading partners. The Dow Jones Industrial Average (^DJI) hovered just above the flatline, as component Boeing (BA) slumped in the wake of a deadly plane crash in India. The S&P 500 (^GSPC) gained roughly 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) also rose about 0.2%. Stocks edged higher after the S&P 500 (^GSPC) snapped this week's run of wins. Investors are adding growing tensions in the Middle East to worries over Trump's trade policy, such as the fragility of the US-China detente. The US dollar sank to its lowest level in three years as fresh price data showed a so-far mild impact from Trump's tariff policies, as wholesale inflation increased less than economists expected. The report came after the consumer counterpart showed an easing in price pressures in the wake of Trump's "reciprocal" tariff hikes in April. Further hints that tariffs are sparing inflation could put the Federal Reserve in a tight spot ahead of its policy meeting next week. Bets on interest-rate cuts this year have mounted, but analysts expect officials to maintain their wait-and-see approach to economic data and policy decisions, with September seen as the most likely spot to resume rate cuts. While investor focus is shifting back to the Fed, Wall Street is still closely following the latest twists and turns in Trump's tariff policy in the hunt for clarity. Read more: The latest on Trump's tariffs US trading partners will get letters within a week or two to set their unilateral tariff rates, Trump reiterated on Wednesday, renewing the threat of no-deal hikes. But Treasury Secretary Scott Bessent told Congress it's "highly likely" that countries in trade negotiations with the US will see an extension of the 90-day tariff pause, currently set to expire July 9. The US dollar ( sank to its lowest level in three years after the Producer Price Index came in below expectations, showing a milder than expected impact from shifting US trade policy. The dollar against a basket of currencies hovered below 98, its lowest level since 2022. Year to date, the index is down more than 9%. Investors sold greenbacks as tensions between Iran and Israel escalated and Trump renewed tariff threats against US trading partners. US wholesale prices rose modestly last month, a sign that inflationary pressures remain contained. Wednesday's CPI report also pointed to contained inflation, increasing expectations of Federal Reserve rate cuts this year. Yahoo Finance's Laura Bratton reports: Read more here. Oracle (ORCL) shares jumped 10% early Thursday after the company's fiscal fourth quarter results topped Wall Street's expectations. Oracle's adjusted revenue of $15.9 billion was ahead of the projected $15.6 billion, while its earnings per share of $1.70 surpassed the expected $1.64. The company raised its annual revenue forecast, as it expects strong demand for its AI-related cloud services. "What is clear is that more customers will use the Oracle database to leverage AI," CEO Safra Ada Catz told analysts in a call after the market close Wednesday. "It's been a long wait for people who own the stock because ... they [Oracle] missed the last two quarters, both on the top and the bottom line, despite the fact that they were booking an enormous amount of business," Citizens head of technology equity research Pat Walravens told Yahoo Finance's Julie Hyman on Market Domination Overtime. Analysts at UBS, Cantor Fitzgerald, Deutsche Bank, KeyBanc, and Melius Research raised their price targets on the stock to as high as $240 on Thursday. US stocks pulled back on Thursday as President Trump renewed his threat to impose "take it or leave it" tariffs on trading partners, while Boeing (BA) shares sank in the wake of a deadly crash in India. The Dow Jones Industrial Average (^DJI) fell roughly 0.4%, with component Boeing slumping after the crash of an Air India flight involving a Dreamliner jet. The S&P 500 (^GSPC) dropped 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) also moved 0.3% lower. US trading partners will get letters soon within a week or two that will set their unilateral tariff rates, Trump reiterated on Wednesday. Weekly claims for unemployment benefits remained at their highest level in eight months during the first full week of June while the number of Americans filing for unemployment insurance on an ongoing basis reached the highest level since November 2021 as the US labor market continues to show signs of slowing. Data from the Department of Labor released Thursday morning showed 248,000 initial jobless claims were filed in the week ending June 7, flat from the week prior and above economists' expectations for 242,000. Meanwhile, 1.956 million continuing claims were filed, up from 1.902 million the week prior and the highest level seen since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs. Chime is set to debut on the Nasdaq later today under the ticker symbol CHYM. The digital bank raised $864 million in its IPO, and priced shares at $27 each for a valuation of $11.6 billion. Chime's entrance in the public markets has been viewed as another indicator of whether the IPO market is thawing after a freeze due to tariff-induced uncertainty. Other recent go-publics, like stablecoin issuer Circle (CRCL) and Nvidia-backed CoreWeave (CRWV), saw massive rallies after their IPOs. As my colleague Josh Schafer wrote yesterday, the largest tech stocks are once again leading the market higher, and that enthusiasm has trickled down to newly issued public offerings. In a June 9 research report, Carson Group associate portfolio manager Blake Anderson found that tech IPOs have been outperforming non-tech IPOs, with shares tied to tech IPOs rising an average of 108% from their deal price. Beyond Chime, other closely watched IPO hopefuls in the pipeline include crypto exchange Gemini; buy now, pay later firm Klarna ( AI chipmaker Cerebras ( and medical supplies company Medline. Read more here about the details of Chime's IPO. Bloomberg reports: Read more here. President Trump's Truth Social posts aren't moving markets like they used to, notes Yahoo Finance's Josh Schafer. Stocks barely budged as he posted on Wednesday that a US-China deal was "done" — something that would have swung markets around a month earlier. Instead, stocks found their direction from economic data, Josh reports: Read more here from today's Morning Brief. The dollar (DX=F) fell further on Thursday as concerns grew about US tariffs after President Trump said he would soon tell trading partners about unilateral levies. Bloomberg News reports: Read more here. Boeing stock fell on Thursday by 8% in premarket trading after an Air India aircraft carrying over 200 people crashed minutes after taking off from the western Indian city of Ahmedabad. Aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner, one of the most modern passenger aircraft in service. Air India confirmed the plane, which was headed to Gatwick Airport in the UK, crashed in a civilian area near the airport, but has not specified if there are any fatalities. It is still not clear what caused the crash. According to Reuters, Boeing confirmed it was aware of the crash and was working to gather more information. The news comes as the planemaker is trying to rebuild trust relating to the safety of its jets and increase production under new Chief Executive Officer Kelly Orthberg. "There's revised fears of the problems that plagued Boeing aircraft and Boeing itself in recent years," said Chris Beauchamp, analyst at IG Group. Economic data: Producer Price Index (May); Initial jobless claims (week ending June 7) Continuing claims (week ending May 31) Earnings: Adobe (ADBE), Lovesac (LOVE), RH (RH) Here are some of the biggest stories you may have missed overnight and early this morning: Boeing stock slides after plane crashes in India The $11 trillion gap in costing Trump's 'big, beautiful' bill Gundlach: 'Reckoning is coming' for US debt Trump says he will set unilateral tariff rates within weeks Americans flunk on retirement literacy. Here's why it matters. Nvidia, Samsung to take stakes in robot AI startup Skild US long-dated debt faces crucial test in $22 billion auction Oracle stock jumps as AI boosts revenue forecast Here are some top stocks trending on Yahoo Finance in premarket trading: Oracle (ORCL) stock rose 8% in premarket trading on Thursday after the tech company raised its annual forecast, driven by demand for its AI related cloud services. "Oracle's once-stodgy image levels up to 'cloud-native mage,' and the competitive map now looks less like a classic three-player real time strategy and more like a battle-royale with everyone dropping in, looking for compute loot", said Michael Ashley Schulman, partner at Running Point Capital Advisors. GameStop (GME) shares slumped on Thursday by 11% after announcing a convertible notes offering. The press release said: "GameStop intends to use the net proceeds from the offering for general corporate purposes, including making investments in a manner consistent with GameStop's Investment Policy and potential acquisitions." Boeing (BA) stock fell 8% before the bell on Thursday after a plane crashed in India, with more than 200 people on board, near the airport in the country's western city of Ahmedabad. The plane, which was headed to Gatwick airport in the UK, crashed in a civilian area. Oil prices pulled back early Thursday morning, reversing earlier overnight gains as traders assessed a US decision to pull some diplomats out of the Middle East. The decision to reduce staffing in Iraq came after Iran threatened to hit US assets in the region ahead of its talks with the US over nuclear-related activity. Brent crude futures fell to under $69 a barrel, while West Texas Intermediate crude traded below $68 a barrel — both down around 1%. Prices jumped over 4% on Wednesday amid reports of a potential evacuation. Reuters reports: Read more here. Gold (GC=F) rose for a second day in a row as tensions in the Middle East, coupled with Trump's claims of upcoming unilateral tariffs, pushed risk-averse investors toward the haven commodity. Bloomberg reports: Read more here. The US dollar ( sank to its lowest level in three years after the Producer Price Index came in below expectations, showing a milder than expected impact from shifting US trade policy. The dollar against a basket of currencies hovered below 98, its lowest level since 2022. Year to date, the index is down more than 9%. Investors sold greenbacks as tensions between Iran and Israel escalated and Trump renewed tariff threats against US trading partners. US wholesale prices rose modestly last month, a sign that inflationary pressures remain contained. Wednesday's CPI report also pointed to contained inflation, increasing expectations of Federal Reserve rate cuts this year. Yahoo Finance's Laura Bratton reports: Read more here. Oracle (ORCL) shares jumped 10% early Thursday after the company's fiscal fourth quarter results topped Wall Street's expectations. Oracle's adjusted revenue of $15.9 billion was ahead of the projected $15.6 billion, while its earnings per share of $1.70 surpassed the expected $1.64. The company raised its annual revenue forecast, as it expects strong demand for its AI-related cloud services. "What is clear is that more customers will use the Oracle database to leverage AI," CEO Safra Ada Catz told analysts in a call after the market close Wednesday. "It's been a long wait for people who own the stock because ... they [Oracle] missed the last two quarters, both on the top and the bottom line, despite the fact that they were booking an enormous amount of business," Citizens head of technology equity research Pat Walravens told Yahoo Finance's Julie Hyman on Market Domination Overtime. Analysts at UBS, Cantor Fitzgerald, Deutsche Bank, KeyBanc, and Melius Research raised their price targets on the stock to as high as $240 on Thursday. US stocks pulled back on Thursday as President Trump renewed his threat to impose "take it or leave it" tariffs on trading partners, while Boeing (BA) shares sank in the wake of a deadly crash in India. The Dow Jones Industrial Average (^DJI) fell roughly 0.4%, with component Boeing slumping after the crash of an Air India flight involving a Dreamliner jet. The S&P 500 (^GSPC) dropped 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) also moved 0.3% lower. US trading partners will get letters soon within a week or two that will set their unilateral tariff rates, Trump reiterated on Wednesday. Weekly claims for unemployment benefits remained at their highest level in eight months during the first full week of June while the number of Americans filing for unemployment insurance on an ongoing basis reached the highest level since November 2021 as the US labor market continues to show signs of slowing. Data from the Department of Labor released Thursday morning showed 248,000 initial jobless claims were filed in the week ending June 7, flat from the week prior and above economists' expectations for 242,000. Meanwhile, 1.956 million continuing claims were filed, up from 1.902 million the week prior and the highest level seen since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs. Chime is set to debut on the Nasdaq later today under the ticker symbol CHYM. The digital bank raised $864 million in its IPO, and priced shares at $27 each for a valuation of $11.6 billion. Chime's entrance in the public markets has been viewed as another indicator of whether the IPO market is thawing after a freeze due to tariff-induced uncertainty. Other recent go-publics, like stablecoin issuer Circle (CRCL) and Nvidia-backed CoreWeave (CRWV), saw massive rallies after their IPOs. As my colleague Josh Schafer wrote yesterday, the largest tech stocks are once again leading the market higher, and that enthusiasm has trickled down to newly issued public offerings. In a June 9 research report, Carson Group associate portfolio manager Blake Anderson found that tech IPOs have been outperforming non-tech IPOs, with shares tied to tech IPOs rising an average of 108% from their deal price. Beyond Chime, other closely watched IPO hopefuls in the pipeline include crypto exchange Gemini; buy now, pay later firm Klarna ( AI chipmaker Cerebras ( and medical supplies company Medline. Read more here about the details of Chime's IPO. Bloomberg reports: Read more here. President Trump's Truth Social posts aren't moving markets like they used to, notes Yahoo Finance's Josh Schafer. Stocks barely budged as he posted on Wednesday that a US-China deal was "done" — something that would have swung markets around a month earlier. Instead, stocks found their direction from economic data, Josh reports: Read more here from today's Morning Brief. The dollar (DX=F) fell further on Thursday as concerns grew about US tariffs after President Trump said he would soon tell trading partners about unilateral levies. Bloomberg News reports: Read more here. Boeing stock fell on Thursday by 8% in premarket trading after an Air India aircraft carrying over 200 people crashed minutes after taking off from the western Indian city of Ahmedabad. Aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner, one of the most modern passenger aircraft in service. Air India confirmed the plane, which was headed to Gatwick Airport in the UK, crashed in a civilian area near the airport, but has not specified if there are any fatalities. It is still not clear what caused the crash. According to Reuters, Boeing confirmed it was aware of the crash and was working to gather more information. The news comes as the planemaker is trying to rebuild trust relating to the safety of its jets and increase production under new Chief Executive Officer Kelly Orthberg. "There's revised fears of the problems that plagued Boeing aircraft and Boeing itself in recent years," said Chris Beauchamp, analyst at IG Group. Economic data: Producer Price Index (May); Initial jobless claims (week ending June 7) Continuing claims (week ending May 31) Earnings: Adobe (ADBE), Lovesac (LOVE), RH (RH) Here are some of the biggest stories you may have missed overnight and early this morning: Boeing stock slides after plane crashes in India The $11 trillion gap in costing Trump's 'big, beautiful' bill Gundlach: 'Reckoning is coming' for US debt Trump says he will set unilateral tariff rates within weeks Americans flunk on retirement literacy. Here's why it matters. Nvidia, Samsung to take stakes in robot AI startup Skild US long-dated debt faces crucial test in $22 billion auction Oracle stock jumps as AI boosts revenue forecast Here are some top stocks trending on Yahoo Finance in premarket trading: Oracle (ORCL) stock rose 8% in premarket trading on Thursday after the tech company raised its annual forecast, driven by demand for its AI related cloud services. "Oracle's once-stodgy image levels up to 'cloud-native mage,' and the competitive map now looks less like a classic three-player real time strategy and more like a battle-royale with everyone dropping in, looking for compute loot", said Michael Ashley Schulman, partner at Running Point Capital Advisors. GameStop (GME) shares slumped on Thursday by 11% after announcing a convertible notes offering. The press release said: "GameStop intends to use the net proceeds from the offering for general corporate purposes, including making investments in a manner consistent with GameStop's Investment Policy and potential acquisitions." Boeing (BA) stock fell 8% before the bell on Thursday after a plane crashed in India, with more than 200 people on board, near the airport in the country's western city of Ahmedabad. The plane, which was headed to Gatwick airport in the UK, crashed in a civilian area. Oil prices pulled back early Thursday morning, reversing earlier overnight gains as traders assessed a US decision to pull some diplomats out of the Middle East. The decision to reduce staffing in Iraq came after Iran threatened to hit US assets in the region ahead of its talks with the US over nuclear-related activity. Brent crude futures fell to under $69 a barrel, while West Texas Intermediate crude traded below $68 a barrel — both down around 1%. Prices jumped over 4% on Wednesday amid reports of a potential evacuation. Reuters reports: Read more here. Gold (GC=F) rose for a second day in a row as tensions in the Middle East, coupled with Trump's claims of upcoming unilateral tariffs, pushed risk-averse investors toward the haven commodity. Bloomberg reports: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
41 minutes ago
- CNBC
Best Stocks: A cybersecurity giant with a red hot AI business and shares poised for a breakout
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — We've written about two cybersecurity giants in our Best Stocks column in recent weeks, CrowdStrike and Zscaler, both of which remain on the list and represent solid leadership within the software industry group. If you've been making money on those names, you'll be delighted to hear that we've got another write-up in the group. When Palo Alto Networks (PANW) hit the list last week, Sean was pumped to get the opportunity to talk about it. Palo Alto is a 20-year old company that was added to the S & P 500 in 2023. It is currently the largest cybersecurity stock in America with a $130 billion market cap, just ahead of CrowdStrike. With Palo Alto, investors get three businesses in one: Strata is their network security platform while Prisma secures the cloud. And then there is Cortex, the AI and automation business, which is currently on fire. Last week CEO Nikesh Arora, one of the most respected executives in Silicon Valley, announced a consolidation of Prisma under the Cortex brand in order to underscore the importance of AI within the company. Speaking at the Bank of America Global Technology Conference on June 3rd, Arora reaffirmed Palo Alto's target to double the business over the next five years. This is a strong stock in a strong sector. Sean's going to lay out the backdrop for you and then share some stuff about why this name is acting so well. Best stock spotlight: Palo Alto Networks Inc (PANW) On the list since: 6/6/2025 Sean — Tech is increasingly becoming the engine of this market. Tariffs may be dominating the headlines, but tech has held its ground, continuing its relative strength that we've seen over the past decade. Via Factset, first-quarter earnings reported by the Mag 7 exceeded estimates by 14.9%, compared to 8.2% for all S & P 500 companies. The Mag 7's actual earnings grew 27.7% from the same period a year ago. Alphabet, Amazon, and Nvidia were among the top 5 contributors to earnings growth for the S & P 500 in Q1. Within the Mag 7, the software-oriented names have outperformed the hardware/discretionary names: The top 2 performers YTD are Meta up 20% and Microsoft up 13%, while the bottom 2 performers are Apple down 19% and Tesla down 18%. Within tech, software is one of the best-performing industries. The iShares Expanded Tech-Software Sector ETF (IGV) , a popular Software ETF, is up 7% YTD and up 33% over the past year, compared to the Invesco QQQ Trust (QQQ) up 4% YTD and up 12% over the past year. Looking at all software-classified stocks within the S & P 500, 90% are currently trading above their 50-day moving average, and 68% are above their 200-day moving average. These stocks sit a median of 9% below their 52-week highs and have a median Relative Strength Index of 58. In comparison, the QQQs show slightly weaker breadth: 85% of its constituents are above their 50-day moving average and 63% are above their 200-day. The Qs are a median 13% below 52-week highs, with a median RSI of 59. This indicates that while both groups are exhibiting strength, Software stocks within the S & P 500 are showing slightly better technical positioning relative to the broader tech-heavy index. Software is the best-in-breed of an already high-performing tech sector. On our list, software makes up the most populous industry with 9 companies: ANSS , CDNS , CRWD , INTU , MSFT , PANW , PLTR , ROP , and ZS . Major breakout? PANW was added to the list late last week. Palo Alto Networks is a platform-based cybersecurity firm focused on network security, cloud security, and general security operations with over 80k enterprise customers. This is PANW's quarterly gross profit since inception, up and to the right: As of PANW's latest earnings report, the company reported $5 billion in annualized recurring revenue (ARR) from its next-generation security (NGS) offerings — a 34% YoY increase. The company expects this momentum to continue, projecting $5.52 billion to $5.57 billion in ARR for Q4, representing 31–32% growth. This strong performance is being driven by demand for AI-powered security solutions, SASE, and software firewalls. The company is also seeing deep traction with large enterprises: 130 customers now generate over $5 million in ARR, and 44 bring in over $10 million. Management's strategy is to have 60–70% of ARR come from these "platformized" clients, supporting long-term scalability and revenue durability. According to management, with this growth trajectory and customer engagement, Palo Alto remains confident in its path toward a $15 billion ARR target by fiscal 2030. (data via Quartr) The stock just recently bounced off its 50- and 200-day moving average. If it can get to the $200 range, we could be in for a major breakout, joining an elite software industry thus far in 2025. Risk management Josh — That bounce Sean is referring to happened exactly where the bulls needed it to. After PANW reported earnings on May 20th, it gapped lower but the buyers stepped up at the $182-$185 level. They bought it at the 200-day and it never closed below. I'd keep it simple and watch for a close below to tell me something's changed. As far as an entry is concerned, a true technician would wait for the breakout above $200 and watch for convincing volume before starting a position. The risk of anticipating the breakout is more chop below that level and potentially being stopped out. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
Forbes
an hour ago
- Forbes
Why AAL Stock Is A Risky Bet
American Airlines (NASDAQ:AAL) shares are currently priced around $11.10, reflecting a 35% decline this year, and positioning itself as a less attractive investment despite its apparently low valuation. A thorough examination of American Airlines' operational performance, financial health, and historical endurance uncovers numerous critical issues that overshadow its reduced price. With that in mind, if you are looking for upside with reduced volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative — having surpassed the S&P 500 and yielded over 91% returns since its launch. Additionally, examine – Boeing Stock Faces Fresh Crisis After 787 Dreamliner Crash In comparing the valuation of American Airlines to the broader market, the stock seems inexpensive based on sales or profit metrics. Its price-to-sales (P/S) ratio is 0.1, which is significantly lower than the S&P 500's 3.0. Likewise, the company's price-to-free cash flow (P/FCF) ratio is 1.8 compared to the S&P 500's 20.5, and its price-to-earnings (P/E) ratio is 11.3 against the benchmark's 26.4. Although these indicators imply a bargain, a more in-depth look at the company's fundamentals paints a more intricate picture. Our dashboard on American Airlines Valuation Ratios provides further details. American Airlines' revenue has seen some growth over the last few years. In the past three years, its revenue has increased at an average rate of 18.0%, surpassing the S&P 500's 5.5% rise. Over the last 12 months, revenues grew by 1.9% from $53 billion to $54 billion, although this is behind the S&P 500's 5.5% growth. However, its latest quarterly revenues experienced a slight drop of 0.2% to $13 billion compared to the previous year, unlike the S&P 500's 4.8% improvement. Despite some revenue growth, the company's profitability continues to be a major concern. American Airlines' operating income over the last four quarters was $2.9 billion, resulting in a low operating margin of 5.4%, considerably lower than the S&P 500's 13.2%. Its operating cash flow (OCF) for the same period was $4.3 billion, leading to a disappointing OCF margin of 7.9% compared to the S&P 500's 14.9%. Moreover, American Airlines' net income over the last four quarters was just $685 million — revealing a very weak net income margin of 1.3%, substantially under the S&P 500's 11.6%. American Airlines' financial stability also appears fragile. As of the latest quarter, the company's debt stood at $37 billion, while its market capitalization was $7.3 billion (as of June 11, 2025). This results in a very unfavorable Debt-to-Equity Ratio of 474.3%, starkly contrasting with the S&P 500's 19.9%. A lower Debt-to-Equity Ratio is usually preferred. On a positive note, cash and cash equivalents amounting to $7.5 billion represent 11.9% of American Airlines' total assets of $63 billion, demonstrating a reasonable cash-to-assets ratio compared to the S&P 500's 13.8%. American Airlines' ability to endure economic downturns has historically been significantly poorer than the S&P 500 index. During the Inflation Shock of 2022, AAL stock dropped 57.7% from a peak of $25.82 in June 2021 to $10.92 in October 2023, while the S&P 500 saw a peak-to-trough decline of 25.4%. The stock has not yet returned to its pre-crisis high. Similarly, during the Covid Pandemic in 2020, AAL stock fell 70.3% from a high of $30.47 in February 2020 to $9.04 in May 2020, markedly underperforming the S&P 500's 33.9% decrease. It has also failed to regain its pre-crisis high from that time. The Global Financial Crisis of 2008 witnessed an even more significant drop, with AAL stock crashing 97.2% from a peak of $61.96 in January 2007 to $1.76 in July 2008, in comparison to the S&P 500's 56.8% decline. The stock has not recovered to its pre-crisis high from 2008 as well. To conclude, while American Airlines exhibits notable revenue growth, this advantage is overshadowed by substantial financial troubles. The corporation grapples with poor profitability and limited financial stability, and its capacity to endure economic downturns is severely compromised. These combined elements result in an overall 'unfavorable' evaluation for the stock. Thus, despite its current very low valuation, American Airlines is regarded as a high-risk investment and an unattractive stock to purchase at its existing price. While it would be prudent to steer clear of AAL stock for now, you might consider exploring the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (a mix of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to deliver strong returns for investors. What's the reason for that? The quarterly rebalanced structure of large-, mid-, and small-cap RV Portfolio stocks offered an agile approach to capitalize on favorable market conditions while minimizing losses when markets decline, as outlined in RV Portfolio performance metrics.
