Spirit Airlines Incorporated SAVE traded over 15 percent higher on Tuesday after raising its guidance for fourth quarter revenue per seat mile. Given that it recently started a new market cycle, we see more upside for this stock.
Spirit Airlines Stock Weekly Chart
Spirit now expects to revenue per seat mile to increase by 11 percent annually rather than its previous estimate of 6 percent. Additionally, the company reduced the range of its expectation for non-fuel costs per seat mile.
"The improvement is primarily driven by higher non-ticket revenue and higher load factor expectations,” Spirit explained in an SEC filing. In plain English, they figured out how to charge more for baggage and other items.
Our projection combines technical analysis with market cycles, which has been positive for this stock. In fact, this move marks the start of a new rising phase of a new cycle for Spirit. We see more upside, as the stock is making a new high and it is still early in the cycle. As such, our projection is now $62-65 for the coming months.
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