CRT Capital Calls Hawaiian Holdings A 'Table Pounding Buy'

After shares of Hawaiian Holdings Inc HA dropped an incredible 27 percent on Friday on a disappointing earnings report, analysts at CRT Capital believe the stock offers exceptional value at current levels. In fact, in a report released today, analyst expressed how baffled they are at the drop.
Selloff overdone
Analysts believe that the correction in Hawaiian Holdings has created an opportunity for value investors. After the 27 percent drop, the stock trades at a 2015 TEV/EBITDAR (total enterprise value to earnings before interest, taxes, depreciation, amortization and restructuring or rent ratio) of only 3.9x, well below the industry average of 5.5x. The lack of material news impacting earnings forecasts for the company left analysts scratching their heads at the huge selloff.
2015 outlook
Analysts are projecting record profits for Hawaiian Holdings in 2015, up 64 percent year-over-year. In addition, pretax margins are expected to rise from 7.2 percent in 2014 to 11.6 percent in 2015. Hawaiian is adding three new A330 planes in 2015 and retiring three 767, maintaining a 50-plane fleet overall.

EPS adjustment
After discussions with Hawaiian Holdings management, CRT Capital lowered its 2015 earnings per share (EPS) estimate only slightly. “We tweaked our ’15 EPS estimate modestly , to $2.54 from $2.56, as lower jet fuel prices ($2.10 per gallon versus $2.40 prior) and better-than-expected unit costs ex-fuel (up 2% versus 3% prior) do not appear to be offsetting greater than anticipated unit revenue weakness (down 3.7 % versus 0%).”
Price target
Hawaiian Holdings is down nearly four percent in early trading today, and CRT Capital analysts call the selloff “irrational.” They recommend “aggressively” buying shares of the stock and maintain a $35 price target.