Yahoo Finance Here's Why Investors May Bet on Alaska Air (ALK) Stock Now
Alaska Air Group ALK is gaining from an uptick in air-travel demand (particularly on the leisure front). The upsurge in passenger volumes makes the ALK stock an interesting investment opportunity.
Let’s delve into the factors working in favor of the Zacks Rank #2 (Buy) stock.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings has been revised 8.3% and 13.1% upward, over the past 60 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at the brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Upbeat Air-Travel Demand: Alaska Air is seeing steady recovery in air-travel demand. On the back of upbeat air-travel demand and favorable pricing, Alaska Air's top line increased 8% year over year in 2023. Passenger revenues too increased 8% in 2023 on a year-over-year basis.
Driven by upbeat air-travel demand, ALK anticipates second-quarter 2024 earnings per share to be between $2.20 and $2.40. To meet the upbeat demand, ALK is boosting capacity. The company expects available seat miles (a measure of capacity) to increase in the range of 5-7% in the second quarter of 2024 from second-quarter 2023 actuals. ALK anticipates 2024 EPS to be between $3.25 and $5.25.
Impressive Price Performance: Driven by the rosy air-travel demand scenario, shares of ALK have gained 21.8% over the past three months compared with its industry’s growth of 13.5% in the same timeframe.
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Bullish Industry Rank: The industry, to which ALK belongs, currently has a Zacks Industry Rank of 95 (of 250 plus groups). Such a solid rank places the company at the top 38% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
An ordinary stock in a strong group is likely to outperform a robust stock in a weak industry. Therefore, taking the industry’s performance into consideration becomes imperative.
Other Stocks to Consider
Some other top-ranked stocks for investors’ consideration in the Zacks Transportation sector are Air Lease AL and Wabtec Corporation WAB. Each stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Air Lease has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 20.15%.
The Zacks Consensus Estimate for 2024 earnings has been revised 39.62% upward over the past 90 days. AL has an expected earnings growth rate of 29.96% for 2024.
Wabtec Corporation’s solid performance in the Freight and Transit segments is boosting its top line. The Zacks Consensus Estimate for WAB’s 2024 earnings has improved 28.37% over the past 90 days. Shares of WAB have surged 64.3% in the past year.
WAB’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missing the consensus mark in the other quarter), delivering an average surprise of 11.46%.
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Air Lease Corporation (AL) : Free Stock Analysis Report
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
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