Why is American Airlines Group Inc. stock underperforming the market?

American Airlines Group Inc. reported a robust financial performance for Q4 2024, with a 4.6% year-over-year increase in operating revenue, reaching $13.66 billion, surpassing the consensus estimate of $13.395 billion. The company achieved an adjusted EPS of $0.86, exceeding expectations of $0.64, and improved its adjusted operating margin to 8.4% from 5.1% the previous year. Notably, American Airlines met its $15 billion debt reduction target a year early and announced a 10-year co-branded credit card partnership with Citi, potentially bolstering its financial position. However, the outlook for Q1 2025 is less optimistic, with a projected adjusted EPS loss between $0.20 to $0.40 and flat to minimal revenue growth, negatively affecting the stock. Despite this, Raymond James analyst Savanthi Syth upgraded the stock rating from Market Perform to Outperform, with a price target of $24, reflecting a positive long-term view. CEO Robert Isom expressed confidence in the company's strategic direction, highlighting operational reliability, network strength, and the benefits of loyalty and co-branded credit card programs as key factors for future success.