Dahlman Rose Starts Spirit Airlines (SAVE) at Buy; See Substantial Growth
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Price: $1.08 --0%
Rating Summary:
4 Buy, 11 Hold, 10 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
Rating Summary:
4 Buy, 11 Hold, 10 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
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Dahlman Rose initiates coverage on Spirit Airlines (NASDAQ: SAVE) with a Buy. PT $18.
Dahlman analyst said, "Our target is based on 9x our 2012 EPS estimate and 4.5x our 2012 EV/EBITDAR estimate. At the current share price, the one-year potential return would be 48.1%. We would consider Spirit’s most direct comparisons to be to Allegiant (Nasdaq: ALGT), JetBlue (Nasdaq: JBLU), and Southwest Airlines (NYSE: LUV). Currently those companies are trading at 13.5x our 2012 EPS estimate and a 2012 EV/EBITDAR of 5.5x. As one can see, this is a significant discount to where Spirit is trading. We attribute the discount in valuation to Spirit's recent Initial Public Offering. It has to prove to investors it is capable of meeting or beating expectations. As Spirit matures as a public company, we believe it will likely trade in a forward multiple range of 8-12x EPS and an EV/EBITDAR multiple of 5-7x."
"We forecast 2011 EPS of $1.31, using an average share count of 53.8 million shares (pro forma 2011 would be $1.19). For 2012, we forecast EPS of $2.09, using a share count of 72.0 million."
For more ratings news on Spirit Airlines click here and for the rating history of Spirit Airlines click here.
Shares of Spirit Airlines closed at $12.15 yesterday.
Dahlman analyst said, "Our target is based on 9x our 2012 EPS estimate and 4.5x our 2012 EV/EBITDAR estimate. At the current share price, the one-year potential return would be 48.1%. We would consider Spirit’s most direct comparisons to be to Allegiant (Nasdaq: ALGT), JetBlue (Nasdaq: JBLU), and Southwest Airlines (NYSE: LUV). Currently those companies are trading at 13.5x our 2012 EPS estimate and a 2012 EV/EBITDAR of 5.5x. As one can see, this is a significant discount to where Spirit is trading. We attribute the discount in valuation to Spirit's recent Initial Public Offering. It has to prove to investors it is capable of meeting or beating expectations. As Spirit matures as a public company, we believe it will likely trade in a forward multiple range of 8-12x EPS and an EV/EBITDAR multiple of 5-7x."
"We forecast 2011 EPS of $1.31, using an average share count of 53.8 million shares (pro forma 2011 would be $1.19). For 2012, we forecast EPS of $2.09, using a share count of 72.0 million."
For more ratings news on Spirit Airlines click here and for the rating history of Spirit Airlines click here.
Shares of Spirit Airlines closed at $12.15 yesterday.
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