CRT Raises Price Target On Hawaiian Holdings

CRT raised its price target on Hawaiian Holdings, Inc. HA from $27 to 31 Thursday and maintained a Buy rating.

Analyst Michael Derchin noted that change is a “result of improving fundamentals.” The price target “assumes the stock trades at 5.5x estimated '15 EBITDAR of $523 million. Our prior PT assumed 5.5x EBITDAR of $486 million.”

“During the next recession, HA is likely to outperform its network airline peers, in our opinion, similar to '09, as competitive capacity shifts away from lower yielding leisure destinations to core business markets. HA's capital allocation plan in '15 is likely to focus on maximizing shareholder value while continuing to build a strong business foundation,” according to Derchin.

Derchin expected “HA to focus free cash flow in '15 on reducing its net debt-to-EBITDAR ratio to 4.0x from 4.5x while maintaining 25 percent cash as a percentage of revenues. Once this goal is achieved, a balanced capital allocation plan is likely to be announced, in our view, by 2Q15.”

The analyst note concluded that the stock is “trading 4.5x estimated '15 EBITDAR, the low end of the 4.5x to 6.5x range for network airlines, the stock remains attractive.”

Hawaiian Holdings, Inc. recently traded at $22.52, up 5.14 percent.