Bank of America Securities analyst Andrew Didora reiterated a Sell rating on Allegiant Travel Company (ALGT – Research Report) yesterday and set a price target of $95.00.
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Andrew Didora has given his Sell rating due to a combination of factors impacting Allegiant Travel Company. One of the main reasons is the company’s aggressive growth strategy in 2025, which is expected to put pressure on unit revenues. With half of the growth occurring during weaker shoulder periods rather than peak times, this could lead to a decrease in unit revenue, despite the potential benefits in unit cost reduction.
Additionally, Allegiant has recorded a significant impairment charge on its Sunseeker resort, which is currently being marketed for sale. The anticipated sale of the resort by the end of 2025, while reducing debt, reflects challenges in managing this asset. Furthermore, the company’s valuation, with a price objective set below the current trading price, supports the underperformance rating, as the expected financial improvements do not significantly alter the outlook for earnings per share in the coming years.
Didora covers the Industrials sector, focusing on stocks such as Delta Air Lines, Alaska Air, and Allegiant Travel Company. According to TipRanks, Didora has an average return of 3.0% and a 57.56% success rate on recommended stocks.