Key Takeaways Shares of American Airlines surged Monday after brokerage firms Jefferies and TD Cowen upgraded their ratings to "buy" and raised their price targets on the carrier's stock.Jefferies said the stock "could see significant surprise to the upside in 2025.

American Airlines Group Inc.’s stock soared 5% Monday, after a slew of upgrades that acknowledged the company is coming out of transitory 2024 challenges to a better backdrop in 2025. The big airlines are in better shape than low-cost and ultralow-cost carriers,

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.

AAL is a chip shot from its Dec. 10 two-year high of $18.20. Since that peak, the shares have consolidated around $17, with their 100-day moving average catching last week's pullback. Year-over-year, the equity is now 30.3% higher.

The upgrades come as American Airlines has seen a substantial improvement in its domestic market, with competitors making cuts and network changes that have led to increased pricing power. Analysts expect this trend to positively affect American's performance, along with the airline's strategic positioning and fleet enhancements.