Analyst Andrew Didora noted that the airline reported better-than-expected third-quarter earnings per share, with the outperformance mainly due to a lower tax rate. For the fourth quarter, the analyst forecasts revenue per available seat mile to improve sequentially to -1.3 percent from -4.4 percent in the third quarter, thanks to lower capacity.
Bank of America Merrill Lynch termed the 7 percent capacity growth projected by the company for 2017 as disappointing, as it had expected a marked slowdown from the 8.5 percent increase in 2016. On the other hand, the firm noted that Southwest Airlines Co LUV expects 2 percent capacity growth compared to flat trend seen by American Airlines Group Inc AAL.
The firm sees the DoJ clearance for Alaska's VA deal as the last hurdle for the closure of the deal. The firm also does not expect a spike in interest expense levels due to the low average interest rate for the debt it raised for funding the deal.
With fuel moving higher, the firm believes multiples should expand. Accordingly, the firm raised its price target for Alaska to $78 from $72, while reiterating its Neutral rating.
At last check, shares of Alaska Air were down 0.93 percent at $74.59.
Full ratings data available on Benzinga Pro.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.