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Hawaiian Holdings Rating Reaches An Altitude Of Buy At Buckingham

Hawaiian Holdings Rating Reaches An Altitude Of Buy At Buckingham

With the outlook for Hawaiian Holdings, Inc. (NASDAQ: HA) brightening, an analyst at Buckingham Research Group gave the airline the firm's top rating in a Thursday note. 

The Analyst 

Buckingham Research analyst Daniel McKenzie upgraded Hawaiian Holdings from Neutral to Buy and lifted his price target from $44 to $46.

The Thesis

Hawaiian Holdings shares are likely to re-rate higher on revenue execution, judging by booking data that indicates an acceleration in travel demand to Hawaii into 2018, McKenzie said in a note. The stock could also benefit from pricing data that likely would improve on the exit of Island Air, a key competitor, the analyst said. 

Buckingham Research's September downgrade of Hawaiian Holdings stock was based on forward booking data that suggested a sharp plunge in bookings from Japan and South Korea to Hawaii due to geopolitical tension on the Korean Peninsula.

See also: Delta CEO Talks Snacks, Free WiFi, Airline Trade Policy

Since then booking data has recovered and even accelerated over last month, thanks to lower prices, McKenzie said. With revenue execution becoming more evident, the analyst said he expects an improvement in sentiment — hence a modest upside over the next 6-12 months.

The entry of Southwest Airlines Co (NYSE: LUV) into intra-island flights is a sentiment overhang, although United Continental Holdings Inc (NYSE: UAL)'s expansion into Hawaii is well-understood and embedded in estimates, the analyst said.

Buckingham projects that premium seats, worth $60 million per year in revenue today, will double in 2018.

The Price Action

Hawaiian Holdings shares have shed 33 percent year-to-date, although they bounced 12 percent from a recent low on the exit of Island Air on Nov. 10.

Hawaiian Holdings shares were up 6.39 percent to $39.45 at the time of publication.

Related Link:

Stock Price Looks Full, But Overall Outlook For Hawaiian Holdings Is Paradise 

Latest Ratings for HA

Mar 2021Wolfe ResearchUpgradesUnderperformPeer Perform
Feb 2021Deutsche BankUpgradesHoldBuy
Jan 2021SusquehannaMaintainsNeutral

View More Analyst Ratings for HA
View the Latest Analyst Ratings


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