UPDATE: Bank of America Reiterates on Alaska Air Group as Cash Returns to Shareholders Will Increase Further in 2014
In a report published Monday, Bank of America analyst Glenn D. Engel reiterated a Buy rating on Alaska Air Group (NYSE: ALK), and raised the price target from $75.00 to $83.00.
In the report, Bank of America noted, “ALK's October guidance indicated steadier than expected revenues and lower fuel prices ($3.18E for 4Q13 vs $3.22 prior). Aided by an expected airport credit, we are raising our 4Q13E to $1.10 (street $0.95) from $1.07, our 2013E to $5.38 ($5.25 street) from $5.35, and our 2014E to $6.75 (street $6.30) from $6.65. ALK management indicated that it could return close to $300mn of cash to shareholders in 2014, up from an estimated $130mn in 2013 and $60mn in 2012. Having paid down debt, funded its pension, and modernized its fleet, capex should trend down in future years, paving the way for even bigger shareholder returns. RASM (revenue per seat-mile) declines crossed over to a 1% gain in October despite intensified competitive pressure by Delta, aided by a recovery in Hawaiian RASM. RASM pressures may ease further next spring as we anniversary capacity hikes in the Alaskan market, but no evidence yet of thaw in relations with DAL. ALK sees upside to code-sharing revenues from a newly merged AMR in 2014.”
Alaska Air Group closed on Friday at $75.59.
Latest Ratings for ALK
|Jul 2015||Imperial Capital||Maintains||Outperform|
|Jun 2015||Morgan Stanley||Assumes||Overweight|
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