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Investing.com -- UBS upgraded Alaska Air Group to Buy from Neutral, saying the carrier is set for a multi-year profit upswing driven by premium seating, loyalty growth, global routes and synergies from its Hawaiian Airlines deal.
The brokerage raised its price target to $90 from $56, about 60% above current levels, and lifted its 2026 and 2027 earnings estimates well ahead of Wall Street’s view.
UBS now forecasts EPS of $6.94 in 2026 and $10.05 in 2027, up from prior estimates of $6.17 and $8.41.
UBS analysts said Alaska’s initiatives could fuel sustained revenue growth and cost gains, with a 200–250 basis point spread between revenue per seat mile and unit costs over 2026–27.
Expanding premium seating to 29% of the fleet could add up to $400 million in revenue, while loyalty growth could contribute another $200 million.
The carrier’s Seattle–Tokyo route alone is expected to add at least $140 million annually, with more international routes planned.
Synergies from Hawaiian Airlines and planned share buybacks are set to account for more than 80% of Alaska’s projected EPS growth through 2027, according to UBS.
Corporate demand is also recovering and competition is easing in key markets such as San Francisco.
“While going from $3.27 in 2025 to over $10 in 2027 appears steep, it implies a 27% CAGR,” UBS wrote, adding that Alaska’s $500 million synergy plan and buybacks should make the ramp achievable.