UBS Cuts Estimtes on Allegiant Travel (ALGT) on Higher Fuel, But Remains Positive on the Stock
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Price: $104.92 -0.46%
Rating Summary:
6 Buy, 5 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 22
Rating Summary:
6 Buy, 5 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 22
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UBS lowered estimates on Allegiant Travel Company (NASDAQ: ALGT) due to higher fuel prices, but raised its price target from $80 to $90 and reiterated a Buy rating.
The firm notes Allegiant paid $3.30/gal in January 2013 (vs. $3.10 Jan 2012) and is likely to pay $3.40-3.50 in Feb/March, This, according to the analyst, created a headwind for their EPS forecasts, which were based on $3.20/gal in Q1 and $3.17 for the year. As such, they are now modeling $3.37/gal in Q1 and $3.44/gal for the year. The firm's FY13 EPS goes down from $5.72 to $4.88 and FY14 goes from $6.81 to $6.60.
Despite the higher fuel prices, they are positive on the name and expect the company's growth opportunities to increase as a result of the US Airways/AMR merger. "We'd expect American’s new mgmt to reduce capacity, including Phoenix, which should help Allegiant importantly," analyst Kevin Crissey said. "Add in Allegiant buying back shares, which given limited float should support the stock price nicely, and you have the potential for decent stock appreciation despite fuel headwinds. It may take time to play out though."
For an analyst ratings summary and ratings history on Allegiant Travel Company click here. For more ratings news on Allegiant Travel Company click here.
Shares of Allegiant Travel Company closed at $79.03 yesterday, with a 52 week range of $47.32-$81.00.
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The firm notes Allegiant paid $3.30/gal in January 2013 (vs. $3.10 Jan 2012) and is likely to pay $3.40-3.50 in Feb/March, This, according to the analyst, created a headwind for their EPS forecasts, which were based on $3.20/gal in Q1 and $3.17 for the year. As such, they are now modeling $3.37/gal in Q1 and $3.44/gal for the year. The firm's FY13 EPS goes down from $5.72 to $4.88 and FY14 goes from $6.81 to $6.60.
Despite the higher fuel prices, they are positive on the name and expect the company's growth opportunities to increase as a result of the US Airways/AMR merger. "We'd expect American’s new mgmt to reduce capacity, including Phoenix, which should help Allegiant importantly," analyst Kevin Crissey said. "Add in Allegiant buying back shares, which given limited float should support the stock price nicely, and you have the potential for decent stock appreciation despite fuel headwinds. It may take time to play out though."
For an analyst ratings summary and ratings history on Allegiant Travel Company click here. For more ratings news on Allegiant Travel Company click here.
Shares of Allegiant Travel Company closed at $79.03 yesterday, with a 52 week range of $47.32-$81.00.
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