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.
Here's Why Alaska Air (ALK) Shares Have Lost 22.8% in a Year
Read MoreHide Full Article
Alaska Air Group’s (ALK - Free Report) shares have lost 22.8% of value in the past year compared with the industry’s 26.8% decline.
Reasons for Plunge
The coronavirus outbreak is taking a significant toll on Alaska Air. The carrier is suffering significant loss of passenger revenues, which plunged 61% year over year in the first nine months of 2020. Decline in passenger revenues is hurting the bottom line. Notably, the carrier incurred losses in each of the first three quarters of 2020.
To compensate for the tepid demand scenario, the carrier reduced 25.5% capacity in the first nine months of 2020. The airline anticipates December as well as fourth-quarter 2020 capacity to be down approximately 40% year over year.
Increasing debt-to-capitalization ratio at Alaska Air is also not favorable. A higher ratio result indicates that a company is more highly leveraged, which carries a higher risk of insolvency. Inclusive of operating leases, debt-to-capitalization ratio was 59% at the end of the third quarter compared with 41% at the end of December 2019.
Amid the coronavirus concerns, low fuel costs are a boon to Alaska Air as fuel expenses comprise a major chunk of airline expenditures. Notably, fuel prices declined 24.3% year over year in the first nine months of 2020. The savings on fuel costs are supporting the bottom line and offsetting the adversities to some extent.
Unfavorable Estimate Revisions
The Zacks Consensus Estimate for current-year bottom-line widened from a loss of $9.47 to a loss of $10.24 per share in the past 60 days.
Zacks Rank & Stocks to Consider
Alaska Air currently carries a Zacks Rank #5 (Strong Sell).
Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Landstar and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Here's Why Alaska Air (ALK) Shares Have Lost 22.8% in a Year
Alaska Air Group’s (ALK - Free Report) shares have lost 22.8% of value in the past year compared with the industry’s 26.8% decline.
Reasons for Plunge
The coronavirus outbreak is taking a significant toll on Alaska Air. The carrier is suffering significant loss of passenger revenues, which plunged 61% year over year in the first nine months of 2020. Decline in passenger revenues is hurting the bottom line. Notably, the carrier incurred losses in each of the first three quarters of 2020.
To compensate for the tepid demand scenario, the carrier reduced 25.5% capacity in the first nine months of 2020. The airline anticipates December as well as fourth-quarter 2020 capacity to be down approximately 40% year over year.
Increasing debt-to-capitalization ratio at Alaska Air is also not favorable. A higher ratio result indicates that a company is more highly leveraged, which carries a higher risk of insolvency. Inclusive of operating leases, debt-to-capitalization ratio was 59% at the end of the third quarter compared with 41% at the end of December 2019.
Amid the coronavirus concerns, low fuel costs are a boon to Alaska Air as fuel expenses comprise a major chunk of airline expenditures. Notably, fuel prices declined 24.3% year over year in the first nine months of 2020. The savings on fuel costs are supporting the bottom line and offsetting the adversities to some extent.
Unfavorable Estimate Revisions
The Zacks Consensus Estimate for current-year bottom-line widened from a loss of $9.47 to a loss of $10.24 per share in the past 60 days.
Zacks Rank & Stocks to Consider
Alaska Air currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , Landstar System, Inc. (LSTR - Free Report) and Herc Holdings Inc. (HRI - Free Report) . Landstar and Knight-Swift carry a Zacks Rank #2 (Buy), while Herc Holdings sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Landstar and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>