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Allegiant Travel Company (NASDAQ:ALGT)'s stock has reached a new 52-week high, soaring to $105.5, marking a significant milestone for the $1.84 billion airline. According to InvestingPro analysis, the stock is currently trading above its Fair Value, with analyst price targets ranging from $82 to $110. This peak comes amidst a year that has seen Allegiant's stock price climb by an impressive 39.94% over the past twelve months. The company's robust performance reflects a strong recovery trajectory and investor confidence in its business model, which has been buoyed by a resurgence in travel demand. As Allegiant continues to navigate the dynamic aviation landscape, technical indicators from InvestingPro suggest the stock is in overbought territory, with 11 additional exclusive insights available to subscribers.
In other recent news, Allegiant Travel Company anticipates a surge in Q4 earnings and operating margins. Analysts at Goldman Sachs have revised Allegiant's December quarter earnings per share (EPS) estimate to $2.15, a notable increase from the previous estimate of $0.85. TD Cowen also affirmed its Hold rating on Allegiant and increased the price target to $70.00, following the company's positive guidance.
The company's recovery from the impact of hurricanes has exceeded initial expectations, leading to a more positive outlook on revenue metrics. Allegiant's cost per available seat mile excluding fuel (CASMex) has improved due to a $15 million gain from the sale of CFM engines. Despite this, some financial health concerns persist, including short-term obligations exceeding liquid assets.
UBS has resumed coverage on Allegiant shares with a neutral rating due to pressures from lower aircraft utilization and increased staffing costs. However, these factors, along with losses from its Sunseeker resort, are expected to improve in the coming year. Allegiant's pilots, represented by the Teamsters union, voted in favor of a strike to negotiate better compensation and work conditions, potentially affecting pilot retention and aircraft utilization.
These developments come amidst a decrease in passenger traffic and revenue passenger miles, largely due to the impact of hurricanes. Despite these challenges, Allegiant reported a slight dip in its third-quarter revenue to $562.2 million, while its loyalty programs and ancillary revenue initiatives saw a 20% increase.
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