We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Virgin America Scales a 52-Week High: Should You Hold?
Read MoreHide Full Article
Shares of CA-based low-cost airline Virgin America hit a 52-week high of $56.46 on Jul 1, before closing the day a bit lower at $56.44. Shares of the carrier, partly owned by British billionaire investor Richard Branson, have appreciated over 40% ever since the Seattle, WA-based Alaska Air Group (ALK - Free Report) inked a $4 billion deal (inclusive of debt and capitalized aircraft operating leases) to acquire Virgin America in April this year. The deal is expected to close by Jan 1, 2017.
The deal (if it materializes) will benefit Virgin America’s shareholders greatly as the offer price of $57 a share represents hefty premium to Virgin America’s closing price on the last trading day (Apr 1) prior to the announcement of the deal. While all eyes will be on the deal’s fate, we note that Virgin America is an impressive brand even on a stand-alone basis.
Virgin America has performed well ever since it went public in late 2014. The low-cost carrier has an impressive earnings history having outshined the Zacks Consensus Estimate in three of the last four quarters, at an average of 8.10%. Results have been aided by low fuel costs. We expect this tailwind to prevail going forward too. Even in valuation terms, the stock looks attractive based on P/E (F1) as the metric is lower than the industry average of 16.70.
Moreover, Virgin America is making constant efforts to expand its operations. We are also impressed by the disciplined cost structure at the company. Moreover, the carrier’s practice of flying a single aircraft type (Airbus A320 family), high asset utilization and outsourcing of activities like baggage delivery, heavy maintenance and reservations are encouraging.
Virgin Americacurrently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include Cathay Pacific Airways Ltd. (CPCAY - Free Report) and GOL Linhas Aereas Inteligentes S.A. , both of which sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Virgin America Scales a 52-Week High: Should You Hold?
Shares of CA-based low-cost airline Virgin America hit a 52-week high of $56.46 on Jul 1, before closing the day a bit lower at $56.44. Shares of the carrier, partly owned by British billionaire investor Richard Branson, have appreciated over 40% ever since the Seattle, WA-based Alaska Air Group (ALK - Free Report) inked a $4 billion deal (inclusive of debt and capitalized aircraft operating leases) to acquire Virgin America in April this year. The deal is expected to close by Jan 1, 2017.
The deal (if it materializes) will benefit Virgin America’s shareholders greatly as the offer price of $57 a share represents hefty premium to Virgin America’s closing price on the last trading day (Apr 1) prior to the announcement of the deal. While all eyes will be on the deal’s fate, we note that Virgin America is an impressive brand even on a stand-alone basis.
Virgin America has performed well ever since it went public in late 2014. The low-cost carrier has an impressive earnings history having outshined the Zacks Consensus Estimate in three of the last four quarters, at an average of 8.10%. Results have been aided by low fuel costs. We expect this tailwind to prevail going forward too. Even in valuation terms, the stock looks attractive based on P/E (F1) as the metric is lower than the industry average of 16.70.
Moreover, Virgin America is making constant efforts to expand its operations. We are also impressed by the disciplined cost structure at the company. Moreover, the carrier’s practice of flying a single aircraft type (Airbus A320 family), high asset utilization and outsourcing of activities like baggage delivery, heavy maintenance and reservations are encouraging.
VIRGIN AMERICA Price and Consensus
VIRGIN AMERICA Price and Consensus | VIRGIN AMERICA Quote
Zacks Rank & Key Picks
Virgin Americacurrently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include Cathay Pacific Airways Ltd. (CPCAY - Free Report) and GOL Linhas Aereas Inteligentes S.A. , both of which sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>