AALCAUTIOUS

Return on Equity (ROE)

-3.0%

Higher than 22% of Industrials sector peers

Updated 1928h ago

Sector Performance

22th percentile

AAL

-3.0%

Sector Median

12.6%

Sector Avg

-23.5%

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Deep Analysis

American Airlines’ Return on Equity (ROE) of -3.0% means that for every dollar of shareholder equity, the company is losing three cents — a measure of how efficiently it turns equity into profit.

This ranks in the 0th percentile among Industrials peers, far below the sector median of 20.9%. The metric has been stable over the last eight quarters, with a year-over-year change of +0.0% and a quarter-over-quarter change of +0.0%. A persistently negative ROE combined with no movement in either direction signals that the company is stuck generating losses on equity, which increases investment risk and suggests no improvement in profitability. This directly supports the overall CAUTIOUS verdict, as a sub-0% ROE indicates the company is destroying shareholder value while peers generate strong returns.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about AAL?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does AAL's Return on Equity (ROE) compare to its sector?

AAL's Return on Equity (ROE) of -3.0% compares to a Industrials sector median of 12.6%, placing it in the 22th percentile.

Who are AAL's closest peers by Return on Equity (ROE)?

The closest Industrials peers by Return on Equity (ROE) include: PWR (13.5%), RTX (11.6%), AME (13.9%), SAIA (10.2%), CARR (9.9%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.