Market Overview

Buckingham Anticipates Takeoff In Spirit Airlines Shares

Buckingham Anticipates Takeoff In Spirit Airlines Shares
Related SAVE
Macquarie Cites Valuation Concerns In United Continental Downgrade
Earnings Scheduled For July 26, 2018
Spirit Airlines: An Aggressive Play That I Would Rather Avoid (Seeking Alpha)

Spirit Airlines Incorporated (NYSE: SAVE) picked up a sell-side bull in Buckingham Research Group Wednesday. 

The Analyst

Buckingham Research Group's Daniel McKenzie upgraded Spirit Airlines from Neutral to Buy and lifted the price target from $42 to $52.

The Thesis

“We have increased comfort with margin execution, aided in part by easing competition and slower growth, which in turn should drive better sentiment and a modest re-rating of the stock, which is the basis for our improved valuation,” McKenzie said in the Wednesday upgrade note. (See the analyst's track record here.) 

Both non-fuel cost performance and an improved supply and demand element in key markets underpin Buckingham's optimistic projections for Spirit, the analyst said. 

The better cost performance should be sustainable, as seen in a new pilot deal and other recent business endeavors, according to Buckingham. 

McKenzie’s new price target comes after a 15-percent pop in share price and Spirit's positioning to execute on pretax earnings growth, he said. 

The Buckingham analyst addressed trade concerns in the note. Investors seeking exposure to airlines will likely select carriers with largely domestic exposure, McKenzie said.

"Just 10 percent of SAVE's flying is international," the analyst said. 

Price Action

Spirit shares were up 0.57 percent at $40.80 at the time of publication Wednesday. 

Related Links:

Barron's Picks And Pans: General Motors, Spirit Airlines And More

Most Airlines Are Cleared For Takeoff, But Spirit May Stay Grounded

Photo by WestportWiki/Wikimedia. 

Latest Ratings for SAVE

Aug 2018BuckinghamMaintainsBuyBuy
Aug 2018MacquarieMaintainsOutperformOutperform
Jul 2018BuckinghamUpgradesNeutralBuy

View More Analyst Ratings for SAVE
View the Latest Analyst Ratings

Posted-In: airlines Buckingham Research GroupAnalyst Color Upgrades Price Target Travel Analyst Ratings General Best of Benzinga


Related Articles (SAVE)

View Comments and Join the Discussion!

Philip Morris' Cigarette Business Remains Strong, Argus Says In Upgrade

Cramer: The Market Is Being An 'Extremist'