Airline Alaska Air Group (ALK), whose subsidiaries, including Alaska Airlines and Hawaiian Airlines, fly to over 140 destinations in North America, Central America, Asia, and the Pacific, has had a smooth landing with Wall Street analysts following strong Q4 results.
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TD Cowen analyst Tom Fitzgerald raised the company’s price target to $110 from $85 and retained a Buy rating on the stock. The new price target implies an upside of around 60% on Alaska Air’s price as of writing. Evercore ISI analyst Duane Pfennigwerth also felt more comfortable on board Alaska Air, raising his price target to $90 from $75 and keeping a Buy rating on the shares.
Holiday Spirit Boosts Alaska Air in Q4
Alaska Air reported adjusted earnings per share (EPS) of $0.97 in Q4, exceeding expectations of $0.47. It also recorded a 38% year-over-year revenue increase, reaching $3.53 billion and roaring past analysts’ expectations of $3.43 billion.
It was helped by strong travel demand during the holiday season and more business travelers. Alaska Air is also feeling the tailwind of its acquisition of Hawaiian Airlines in September. Indeed, Alaska Air has a goal to generate an additional $1 billion in profits by 2027, capitalizing on its acquisition of Hawaiian Airlines and the growing demand for premium travel.
Analysts See Global Growth Ahead for Alaska Air
Fitzgerald of TD Cowen said Alaska Air and Hawaiian Airlines are “fitting hand in glove,” and the group should now be viewed as one of the leaders in the airline industry. He added that not enough consideration has been given to its earnings growth potential as it turns into a “true global carrier.”
Evercore’s Pfennigwerth also likes Alaska Air’s prospects in the wake of the Hawaiian deal. He has raised the company’s FY25 and FY26 EPS estimates to $6.15 and $7.50 from $5.85 and $7.25, respectively.
Is ALK a Good Buy?
On TipRanks, ALK has a Strong Buy consensus rating based on 13 Buys and 1 Hold recommendation. The highest price target is $110. ALK stock’s consensus price target is $83.92, suggesting an opportunity for about 22% upside from current levels.
