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Barclays Reinstates Frontier Group Holdings Inc (ULCC) at Overweight 'given favorable future growth potential at a current discounted price'

August 10, 2022 6:24 AM EDT
Get Alerts ULCC Hot Sheet
Price: $10.31 -4.63%

Rating Summary:
    11 Buy, 1 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 6 | Down: 13 | New: 58
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Barclays analyst Brandon Oglenski reinstates coverage on Frontier Group Holdings Inc (NASDAQ: ULCC) with a Overweight rating and a price target of $19.00.

The analyst comments "Following an unsuccessful attempt to create a larger ultra-low cost carrier (ULCC) in the US through the prior proposed merger with Spirit, we see Frontier Airlines pursuing an aggressive organic growth strategy that should deliver meaningful shareholder upside. Of course the market is focused on the near-term health of the US economy, but we see long-term value in Frontier’s growth oriented strategy. Although Frontier’s profitability has been subdued relative to higher cost competitors during the post-pandemic recovery this summer, we see this differential as largely transitory given prior ambitious growth plans that have been severely limited by pilot availability. We expect pilot recruitment and training efforts to afford Frontier significantly increased network capacity in 2023 and beyond, allowing for better leveraging of current fixed costs. Beyond current cost pressures, we see the company’s order book with Airbus as a competitive advantage which supports favorable aircraft acquisition prices as well as low cost growth through leveraging the future delivery of larger and more fuel efficient A321 NEO aircraft."

For an analyst ratings summary and ratings history on Frontier Group Holdings Inc click here. For more ratings news on Frontier Group Holdings Inc click here.

Shares of Frontier Group Holdings Inc closed at $13.96 yesterday.



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