Mesa Air's Bumpy Ride To Normalize By 2025 Despite Q2 Turbulence, Analyst Sees Clear Skies Ahead

  • Raymond James analyst Savanthi Syth upgraded Mesa Air Group Inc MESA to Market Perform from Underperform
  • The analyst believes pilot attrition is improving and is below the pandemic level, and a near-term attrition rate hike is unlikely amid new regional pay rates. 
  • Syth expects the pilots shortage problem will be solved in the next 12-18 months and expects it to normalize by 2025. The analyst expects the company to reach quarterly EPS of around $0.20 by Q4 of FY 2025. 
  • However, the analyst is not impressed with the disappointing Q2 FY 2023 results this week.
  • Revenues of $121.8 million missed the consensus of $138.7 million, while adjusted EPS of ($0.53) missed the consensus of ($0.27).
  • Syth expects revenues and adjusted EPS of $552 million and $(0.93) in FY 2023, respectively. The analyst projects revenues of $664 million and adjusted EPS of $0.27 in FY2024. 
  • Price Action: MESA shares are trading higher by 4.23% at $1.48 on the last check Friday.
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