Recently, we shared a compilation of the 15 NASDAQ Stocks with the Lowest P/E Ratios. This article will examine how American Airlines Group Inc. (NASDAQ:AAL) compares to other NASDAQ stocks.
At the beginning of the year, analysts and economists anticipated that the U.S. economy would improve by 2025, with the stock market set for another year of above-trend growth. However, recent updates indicate that growth projections are being adjusted downwards slightly.
Forecasting teams from major firms like Morgan Stanley and Goldman Sachs have revised their GDP forecasts for 2025. Morgan Stanley now expects a 1.5% increase in growth, while Goldman has adjusted its forecast to 1.7%.
Year-end targets for the S&P 500 may be overly optimistic. Should current projections hold true, it could lead to underperformance against the 2024 growth trends, negatively affecting the NASDAQ 100 index as well. As of March 18, the S&P 500 has declined over 3.30%, and the NASDAQ 100 index is down more than 5.50%. The end of Q1 approaches amidst market volatility due to the new U.S. administration’s tariff policies.
Lori Calvasina, head of US equity strategy at RBC Capital Markets, noted that the U.S. equity market might withstand downturns if circumstances sour. She mentioned in a client note on March 9 that while they expect some absorption of a 5-10% drawdown, risks for greater declines of 10% or more have increased. She anticipates a potential ‘growth scare’ could lead to a 14-20% decline from the peak, entering the bear territory.
President Donald Trump addressed the potential economic disruptions caused by his tariff strategies. In a March 9 interview with Fox Business, he commented:
“There is a period of transition because what we’re doing is very big… We’re bringing wealth back to America. That’s a big thing… it takes a little time, but I think it should be great for us.”
Our Methodology
To create the list of NASDAQ stocks with the lowest P/E ratios, we initially identified 40 NASDAQ companies with a forward P/E ratio below 10 and a market cap exceeding $150 million. From this pool, we selected the 15 companies with the lowest ratios and ranked them based on the number of hedge fund holders as of Q4 2024.
Our interest in stocks favored by hedge funds stems from our findings that emulating the top stock picks of leading hedge funds can yield significant market outperformance. Our quarterly newsletter strategy has outpaced its benchmark by 218 percentage points, boasting a return of 373.4% since May 2014.
Forward P/E ratio: 6.10
No. of Hedge Fund Holders: 59
American Airlines Group Inc. (NASDAQ:AAL) is a prominent air carrier providing scheduled flights and cargo services across numerous domestic and international routes.
Recently, the company revised its financial outlook for Q1 2025, noting a weaker revenue environment than earlier expected due to factors such as Flight 5342 and a slowdown in domestic leisure travel. AAL anticipates flat revenue compared to the previous year, down from an initial growth forecast.
Analysts largely maintain their ratings for AAL, with minor adjustments to price targets. Citi’s analyst Stephen Trent reaffirmed a Buy rating with a target of $21.50, despite recognizing the weaker revenue outlook but expressing optimism about AAL’s medium-term growth prospects. He highlighted robust demand for international travel, increasing loyalty revenue, and plans to engage corporate clients as strengths.
Overall, AAL ranks 2nd among the NASDAQ stocks with the lowest P/E ratios. While AAL presents investment potential, we believe AI stocks might offer better returns in a shorter time. For those interested, readers can check our report on the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article was originally published at Insider Monkey.
