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Investing.com - Evercore ISI has reduced its price target on Alaska Air (NYSE:ALK) to $65.00 from $70.00 while maintaining an Outperform rating on the stock. According to InvestingPro analysis, Alaska Air is currently undervalued, with the stock trading at $59.13 and showing a PEG ratio of just 0.53, indicating attractive growth potential relative to its valuation.
The adjustment comes after Alaska Air updated its third-quarter 2025 earnings guidance toward the lower end of its existing $1.00-$1.40 range, citing higher unit costs in both fuel and non-fuel categories that offset revenue improvements. Despite these challenges, the $6.82B market cap carrier maintains a "GOOD" overall financial health score on InvestingPro, which offers comprehensive analysis through its Pro Research Report, available for 1,400+ US stocks.
Despite the cost pressures, Alaska Air reported positive revenue trends, with unit revenue now expected to reach the high end of its previous guidance range of flat to low-single-digit growth, driven by double-digit improvement in corporate demand and continued strength in premium offerings.
Evercore ISI now models 2% unit revenue expansion for the carrier in the third quarter, up from its previous estimate of 1% growth, reflecting the stronger-than-expected revenue performance.
The research firm has moderated its 2025 earnings per share estimate for Alaska Air to $2.75 from $3.27, while maintaining its 2026 earnings per share projection of $5.00.
In other recent news, Alaska Airlines announced that Diana Birkett Rakow will become the CEO of Hawaiian Airlines effective October 29, following the retirement of Joe Sprague. Additionally, Alaska Airlines is expanding its international routes, with a new nonstop service between Seattle and Seoul Incheon starting on September 12, utilizing Hawaiian Airlines’ 787-9 Dreamliner aircraft. The airline also revealed plans for a new daily nonstop route from Seattle to Reykjavík, Iceland, beginning May 28, 2026, using Boeing 737-8 MAX aircraft.
In terms of technological advancements, Alaska Airlines will equip its entire fleet with Starlink Wi-Fi starting in 2026, with full implementation expected by 2027. This service promises gate-to-gate connectivity with significantly faster speeds than current offerings. Furthermore, Alaska Airlines will offer free Wi-Fi to Atmos Rewards members from 2026, expanding a benefit previously exclusive to T-Mobile customers. This initiative will be available on Starlink-equipped aircraft, with T-Mobile as the presenting partner. These developments highlight Alaska Airlines’ commitment to enhancing its services and expanding its reach.
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