American Airlines back in ‘Big 3’ carriers, brokerages predict strong 2025

American Airlines' stock is poised for a strong 2025 as the carrier emerges from a challenging year, according to brokerages Jefferies and TD Cowen, who upgraded the stock to a "buy" rating on Monday. Shares of the carrier were up nearly 5% at $17.76 in premarket trading. The carrier spent much of 2024 rebuilding its sales strategy and mending relationships with corporate clients after a sales and distribution approach backfired. American had implemented a strategy aimed at renegotiating contracts with corporate travel agencies and clients, reducing perks and discounts, which it pushed aggressively since April 2023. The approach had resulted in an exodus of corporate clients last year, negatively impacting the airline's revenue. American fell significantly behind its network competitors United Airlines and Delta Air Lines, the other members of the "Big 3" network carriers. "In hindsight, we were too early with our upgrade a year ago and then failed to appreciate the transitory nature of their headwinds when we downgraded the shares in July," TD Cowen's Tom Fitzgerald wrote in a note. The brokerage raised its price target on the stock to $25 from $17 and said the legacy carrier is expected to benefit from an improvement in domestic pricing and the return of its corporate customers.<br/>