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Why Do Imperial Capital & Barclays Still Like Spirit Airlines?

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Shares of discount airline, Spirit Airlines Incorporated (NASDAQ: SAVE), jumped 4 percent in trading on February 10 following the company’s impressive fourth quarter earnings results.

Highlights from Spirit Airlines’ Q4 earnings include $0.80 per diluted share, marking a 43 percent increase from the same quarter a year prior and beating analysts’ consensus estimates by $0.02. The company’s total operating revenue was $474.5 million, an increase of 13 percent increase on a year-over-year basis, driven by an increase in flight volume.

This year marks the 8th year in a row of profitability for Spirit Airlines. In total, the company ended the year with $633 million in cash which it plans to use for its $100 million share buyback plan.

Related Link: This 'Unlikely Dynamic' Is Happening At Spirit Airlines

Ben Baldanza, Spirit’s Chief Executive Officer said of its earnings, “We have the right team, resources, and business model to continue to successfully grow our business. I’m pleased to be a part of the Spirit team and am excited about bringing our ultra-low fares to even more people in more places.”

In 2014, Spirit Airlines added 24 new routes with 7 of them in the fourth quarter. The airline also added 7 new airplanes to its fleet in Q4, bringing its total fleet to 65 going into 2015. The company also announced it will have 10 new routes, 7 of which will be international starting this year.

In total, Spirit Airlines plans to add 26 new routes and 15 new aircrafts by the end of 2015. Many are positive that Spirit Airlines’ long term plans will help the company maintain double-digit revenue and earnings growth for a long time coming.

Imperial Capital analyst Bob McAdoo weighed in on Spirit Airlines on February 11 following the company’s Q4 earnings, reiterating an Outperform rating on the stock and a price target of $100.

The analyst explained, “In our view, Spirit remains one of the few growth stories in the U.S. airline industry, having generated double-digit growth across revenue, EBITDA, and EPS each year since 2007. The addition of new aircraft and markets, including 26 new nonstop routes beginning in 2015, should help drive additional passenger growth, we believe.”

Bob McAdoo has rated Spirit Airlines 10 times since January 2013, earning a 90 percent success rate recommending the stock and an impressive +75.6 percent average return per recommendation. Overall, McAdoo has a 78 percent success rate recommending stocks and a +35.2 percent average return per recommendation.

Similarly on February 11, Barclays analyst David Fintzen maintained an Overweight rating on Spirit Airlines with a $110 price target, naming the stock as one of his top picks. He noted, “Spirit’s focus on price sensitive travelers means that it can reach deeper down the demand curve at industry-leading returns. That allows it to further develop a customer base that remains unappealing to higher-cost competitors.”

David Fintzen has rated Spirit Airlines 16 times since September 2012, earning a 94 percent success rate recommending the company and a +54.6 percent average return per recommendation. Overall, the analyst has a 76 percent success rate recommending stocks and a +31.6 percent average return per recommendation.

On average, the top analyst consensus for Spirit Airlines on TipRanks is Strong Buy.

Latest Ratings for SAVE

DateFirmActionFromTo
Nov 2016CitigroupDowngradesBuyNeutral
Sep 2016Imperial CapitalInitiates Coverage onOutperform
Aug 2016CitigroupMaintainsBuy

View More Analyst Ratings for SAVE
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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Analyst Color Long Ideas Analyst Ratings Trading Ideas

 

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