Shares of Alaska Air Group Inc. (ALK: NYE) have surged by over 3% following the airline’s revision of its first-quarter 2024 outlook. The airline now expects to report a narrower loss per share (EPS) compared to their previous estimates. The exact figures of the revised guidance are between an adjusted loss per share of $0.55 and $0.45. This represents a significant improvement on their earlier predictions.
This positive revision comes despite operational challenges faced by Alaska Air earlier this year, including the grounding of Boeing 737-MAX aircraft which impacted their schedule. However, the company cites strong demand as a key factor in their improved financial forecast.
Stock Target Advisor’s Analysis on Alaska Air:
Stock Target Advisor advises a ‘Hold’ position on Alaska Air’s stock. The target price is set at $50.88, and it is expected that the price could change by 31.77% in the coming 12 months.
On average, analysts set the target price at $49.67, with a ‘Strong Buy’ rating. ALK stock shows positive signals such as being under-booked versus its book value, good cash flow, excellent capital utilization, and a high market capitalization. However, negative signals include the stock being overpriced concerning earnings, seeing below-average total returns, and being overpriced on a cash flow basis as well as a low revenue growth.
The Airline sector’s average analyst rating is ‘Strong Buy’, and it has a neutral rating from Stock Target Advisor. The average return for the sector in the past month is -6.76%. Renowned analysts covering this sector are Raymond James, Deutsche Bank, Barclays, Goldman Sachs & Co., and TD Securities.
Conclusion:
Strong demand propelling Alaska Air’s promise of a narrowed loss per share in its revised Q1 2024 outlook has created optimism among investors, consequently leading to a swell in stock prices. As a result of thorough analysis, the stock seems to be a ‘Hold’ at this stage from an investment perspective.
