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On Wednesday, Morgan Stanley (NYSE:MS) analysts maintained an Overweight rating on Alaska Air (NYSE:ALK) stock, with a price target of $83.00. Currently trading at $51.22, the stock shows potential upside according to InvestingPro data, with analyst targets ranging from $49 to $83 and a consensus recommendation leaning strongly toward Buy. The decision comes as Alaska Air plans to expand its international routes by introducing direct flights from Seattle to Rome.
The expansion into Europe is an integral part of Alaska Air’s Investor Day plan, which initially aimed to focus on Asian destinations. The early launch of European routes indicates a proactive approach by the airline’s management, particularly as Transatlantic routes are currently seen as more robust than Transpacific ones.
Morgan Stanley analysts view this strategic move as a positive development for the airline, enhancing its international growth prospects. The expansion is aligned with Alaska Air’s ambition to be recognized as a fourth legacy carrier, as outlined in its Investor Day plan.
The analysts believe that this step is crucial for Alaska Air to achieve its projected earnings per share target of over $10 by 2027. The airline’s management continues to focus on growth and expansion to meet its long-term objectives.
In other recent news, Alaska Air Group reported its first-quarter 2025 earnings, revealing a larger-than-expected net loss of $95 million, with earnings per share at -0.77, missing the forecasted -0.71. Revenue for the quarter was $3.1 billion, falling short of the anticipated $3.18 billion. Despite the financial setback, the company remains confident in its long-term growth strategy, with a focus on Hawaii as a strong market. Additionally, Alaska Airlines announced a new partnership with Philippine Airlines, allowing passengers to book nonstop flights to Manila from various U.S. locations and earn Mileage Plan miles. This partnership marks Philippine Airlines as Alaska’s 32nd global partner and expands travel options significantly. In corporate governance updates, Alaska Air Group’s stockholders approved amendments to the 2016 Performance Incentive Plan and the Employee Stock Purchase Plan, extending these through 2035. The company’s bylaws were also amended to address foreign ownership limitations and other administrative changes. Lastly, KPMG LLP was ratified as the independent registered public accountants for the fiscal year 2025.
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