Citigroup Reiterates Buy Rating, $27 PT on Spirit Airlines Incorporated

In a report published Monday, Citigroup reiterated its Buy rating and $27.00 price target on Spirit Airlines Incorporated

. Citigroup noted, “In our opinion, Friday's sell-off (on the back of an announced 3Q12 RASM decline) was a significant overreaction. We believe the market was mistakenly perturbed about a perceived structural shift in the company's RASM generation (a concern that seems at odds with statistical evidence). As we also have no reason to believe that management is not being forthright (in seeing normalized 3Q12 RASM up y-o-y), we reiterate our Buy rating on the shares. A very simplistic analysis reveals that every 200bps reduction in our annual RASM growth estimate knocks ca. $0.25 off of 2013E EPS and ca. $0.65 off of 2014E. However, as we believe that elements of the market may be conducting this analysis, we have profound concerns that this approach is overly simplistic.” Spirit Airlines Incorporated closed on Friday at $16.58.