American Airlines (AAL) Stock Gains 27% in a Month as Iran War Fears Ease – Analysts Weigh In

TLDR

• AAL is up 11% since Barron’s February pick and 27% over the past month as Iran War fears ease
• TD Cowen analyst Tom Fitzgerald has a Buy rating and $20 price target on AAL, implying 35%+ upside
• Corporate, premium, and international travel demand remain strong; weakness is limited to the coach cabin
• American Airlines plans to install SpaceX Starlink Wi-Fi on 500+ Airbus narrowbody aircraft from early 2027
• Spirit Airlines’ market exit is seen as a competitive tailwind for American

American Airlines has had a rough few months, but the stock is proving resilient.

AAL was picked as a buy on February 26. Two days later, U.S. and Israeli military operations launched what became known as the Iran War. The Strait of Hormuz closed, oil spiked, and airline stocks took a hit.

American Airlines Group Inc., AAL

But the story didn’t end there. As markets began pricing in a potential end to the conflict, AAL bounced hard — up 27% over the past month. That comfortably outpaced the U.S. Global Jets ETF (JETS), which gained around 15% over the same period.

The stock currently trades near $14.94, which analysts at Simply Wall St have flagged as close to their fair value estimate.

Oil prices remain elevated, and jet fuel costs are a real concern for all carriers. Higher fuel costs typically get passed on to passengers through higher airfares, which can weigh on demand. But so far, the damage looks contained.

He added that the big three airlines appear to be tracking near the high end of second-quarter guidance, with potential for positive second-half 2026 revisions.

Starlink Deal Adds a New Layer

American announced plans to install SpaceX’s Starlink satellite internet across more than 500 Airbus narrowbody aircraft starting in early 2027. The move is seen as a step toward repositioning AAL as a higher-quality carrier, with better in-flight experience potentially driving stronger loyalty and premium revenue.

The Starlink rollout ties directly into American’s push to improve margins through premium cabin performance and its AAdvantage credit card partnerships — both of which analysts already view as central to the investment case.

That said, the retrofit program involves real capex and execution risk. American still carries a heavy debt load, and any demand shock or cost surprise could amplify pressure on the balance sheet.

Competitive Field Getting Smaller

Spirit Airlines’ exit from the market is seen as a meaningful tailwind. American could pick up price-sensitive travelers who previously flew Spirit, adding volume without needing to cut fares.

He acknowledged investor concern that schedule cuts and price hikes could hurt demand, but said he doesn’t see that playing out given the continued appetite for travel and a shrinking number of competitors.

American is also working to expand its international network and has improved on-time arrival rates over the past year.

Analyst projections place AAL revenue at $66.8 billion with earnings of $2.1 billion by 2029, implying roughly 6.9% annual revenue growth from current levels.

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