American Airlines' stock plummeted 6.3% during intraday trading on Thursday, as the airline sector faced broad selling pressure.
The decline is attributed to a sharp surge in crude oil prices of over 6%, which directly increases fuel costs—a major operational expense for airlines. The spike in oil prices is linked to heightened geopolitical risks, as market sentiment was dampened by signals of more aggressive attacks on Iran, threatening a prolonged conflict in the Middle East.
Adding to the negative sentiment, TD Cowen lowered its price target on American Airlines to $15 from $17, maintaining a Buy rating but indicating a reduced valuation expectation. This analyst action contributed to the downward pressure on the stock.
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