Allegiant Travel stock rises as Blackstone to acquire Sunseeker Resort

Investing.com - Allegiant Travel Company (NASDAQ:ALGT), currently valued at approximately $1.05 billion, announced Monday that funds affiliated with Blackstone (NYSE:BX) Real Estate have agreed to acquire the Sunseeker Resort for $200 million, with the transaction expected to close in the third quarter of 2025. According to InvestingPro data, the company’s stock has shown significant volatility, with a notable 9.7% gain in the past week despite a challenging six-month period.

The announcement follows a Bloomberg article in mid-June that reported negotiations to sell the resort had narrowed down to Blackrock (NYSE:BLK). While many investors had anticipated a sale, there was significant uncertainty about completing it by summer given the current macroeconomic uncertainty.

Raymond (NSE:RYMD) James reiterated a Strong Buy rating and $78.00 price target on Allegiant Travel following the news. The firm noted the sale price was "generally in-line to better than expectations," though likely below more bullish investor assumptions of approximately $250 million.

The $200 million sale price compares to Raymond James’ estimate range of $150-225 million. The firm believes the transaction removes a sentiment and earnings overhang for the company.

Raymond James currently estimates Sunseeker creates approximately $1.60, $0.70, and $0.40 earnings per share drags for Allegiant in 2025, 2026, and 2027, respectively, though these impacts are not reflected in the firm’s current cash flow projections.

In other recent news, Allegiant Travel Company has agreed to sell its Sunseeker Resort Charlotte Harbor to Blackstone for $200 million. This transaction is aligned with Allegiant’s strategy to focus on its airline operations, and the proceeds will be used to repay debt and strengthen the company’s balance sheet. The sale is expected to close in the third quarter of 2025. Meanwhile, Allegiant reported a 9.2% increase in scheduled service passengers for May 2025 compared to the previous year, despite a decrease in load factor. Revenue passenger miles also grew by 10.2%, while available seat miles increased by 16.3%.

In analyst updates, Evercore ISI upgraded Allegiant’s stock from In Line to Outperform, citing the company’s refocus on its core airline business. The firm set a price target of $75.00, suggesting potential growth as Allegiant simplifies its business model. UBS initiated coverage with a Neutral rating and a $59.00 price target, anticipating Allegiant’s earnings per share to align with guidance but noting revenue pressure from lower yields. These developments come as Allegiant continues to adjust its operations and strategy, attracting attention from investors and analysts alike.

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