Shares of Alaska Air Group (NYSE:ALK) tanked as the company’s revenue forecasts fell short of expectations due to a decline in fare prices. Indeed, U.S. airline fares dropped by 19% on a year-over-year basis in June. As a result, the company now predicts an 8-10% increase in sales for 2023 compared to 2022, falling short of the average analyst expectation for an 11% growth. Analysts attribute this to lower fuel costs and a more balanced cost basis for carriers, despite robust demand, primarily for international destinations.
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For the second quarter, Alaska Air’s non-GAAP EPS of $3 exceeded the average estimate of $2.71, and its revenue of $2.84B surpassed expectations by $70M. The Seattle-based company anticipates a 0-3% revenue increase in the third quarter compared to the same period in 2022.
Is ALK a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ALK stock based on seven Buys assigned in the past three months, as indicated by the graphic above. In addition, the average price target of $68.18 per share implies 44.3% upside potential.
