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Alaska Air earnings per share (EPS) is expected to swing back to positive territory for the first time in six quarters on Thursday, more than doubling to $1.09 per share compared to a huge loss of -$3.32 per share seen in the same period a year ago.
The fifth-largest airline in the United States would report revenue growth of over 170% to $1.9 billion. The airline company has beaten earnings three times in the last four quarters. Alaska Air shares surged over 10% so far this year.
On the other hand, while Delta Air Lines reported greater profits and higher revenues for its third quarter last week. However, the airline company warned that higher fuel prices would negatively impact its bottom line in late 2021 despite improving travel demand. The same concern echoes for Alaska Air as well.
“Demand for travel from the Pacific Northwest to Hawaii, southern California and Alaska was strong during the quarter. Of course, the governor of Hawaii urged people not to travel to his state, so we don’t expect a big positive surprise,” noted Helane Becker, equity analyst at Cowen.
“Jet fuel prices doubled off the 2020-pandemic lows, and if the world’s economies recover, they are likely going to go higher. Airlines are working to de-carbonize, but that’s years away, and won’t help 2022, or for that matter 2023 or2024 jet fuel costs.”
Alaska Air Stock Price Forecast
Seven analysts who offered stock ratings for Alaska Air in the last three months forecast the average price in 12 months of $82.29 with a high forecast of $97.00 and a low forecast of $73.00.
The average price target represents a 43.14% change from the last price of $57.49. All of those seven analysts rated “Buy”, according to Tipranks.
Morgan Stanley gave the base target price of $82 with a high of $122 under a bull scenario and $41 under the worst-case scenario. The firm gave an “Overweight” rating on the airline’s stock.
“Why Overweight? We launched coverage on Alaska Air (ALK) last fall as EW recognizing it as a high-quality story that can become very attractive over time but also an airline that ranked mid-pack on most metrics/characteristics and had a tendency of falling between the cracks with investors as well. The good news is that the market has now noticed ALK and it has been a strong performer in the rising industry tide. We still see plenty of upsides ahead,” noted Ravi Shanker, equity analyst at Morgan Stanley.
Several other analysts have also updated their stock outlook. Evercore ISI raised the target price to $80 from $75. JPMorgan lifted the price objective to $97 from $94.
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This article was originally posted on FX Empire