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.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
