This American Airlines (AAL) downgrade by Raymond James is emblematic of how this market's become. American is doing great relative to its old self, spewing cash. AAL has more than $7 billion in EBITDA and will probably make $5.40 this year. It sells at $34.
But its sales are down by 4.3%, which is worse than the other carriers -- down by about half that. The fact is, once again, as I pointed out yesterday, it doesn't matter how much you make: If you can't make more than last year, and you aren't going to make more next year, then you cannot gain adherents.
After all, AAL can't be taken over, there is too much concentration, it's business is unlikely to pick up unless there is a big acceleration in worldwide growth and its competitors are equally well-funded. So it can't really do anything to improve its situation, other than buy as much stock as it can with its cash or offer an unsustainable dividend.
What an odd thing to be making all of that money and not be able to generate support on Wall Street.
But Wall Street only cares about growth -- the faster the better. AAL doesn't have it. So be it.