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Allegiant (ALGT) Reports Stellar October Traffic Figures

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Allegiant Travel Company (ALGT - Free Report) reported impressive traffic numbers for October, as air-travel demand recovers in the United States from Delta variant-led woes. With more Americans getting vaccinated, the scenario looks positive on a year-over-year and year-over-two-year basis.

Scheduled traffic (measured in revenue passenger miles) surged 51.2% from the October 2020 levels. Capacity (measured in available seat miles) for scheduled service increased 27.8% from the October 2020 reading. With the traffic surge outweighing capacity expansion, the load factor (% of seats filled by passengers) in October expanded 11.6 points to 74.7% from the year-ago period’s levels. For the total system (including scheduled service and fixed fee contract), Allegiant carried 51.4% more passengers in October 2021 from the year-ago period’s level.

Compared with the October 2019 levels (pre-COVID), scheduled traffic and capacity surged 7.4% and 19.6%, respectively. The load factor tanked 8.4 points to 74.7% as the increase in traffic was lower than capacity expansion. For the total system, the airline carried 5.1% more passengers in October 2021 from October 2019 levels.

With oil prices shooting up, Allegiant is witnessing a rise in fuel cost per gallon. Fuel price per gallon in October is estimated to have been $2.52 compared with $2.24 in September.

Zacks Rank & Stocks to Consider

Allegiant currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

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 C.H. Robinson Worldwide, Inc. (CHRW - Free Report) .

The long-term expected earnings per share (three to five years) growth rate for Knight-Swift is pegged at 15%. The company is benefitting from an improvement in adjusted operating ratio. Notably, adjusted operating ratio improved to 82.8% in the first nine months of 2021 compared with 86.6% reported in the first nine months of 2020. In third-quarter 2021, the metric improved to 81.3% from 83.9%, a year ago.  

This uptick in adjusted operating ratio is primarily driven by an increase in revenues in the Trucking, Logistics and Intermodal segments. Notably, the lower the value of the metric, the better. The stock has surged 47.2% in the past year. Knight-Swift sport a Zacks Rank #1 (Strong Buy).

The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. The company is benefitting from a gradual recovery in the economy, freight market conditions in the United States.

The company’s top and the bottom line increased substantially in each quarter from the third quarter of 2020, owing to robust revenues generated from the primary segment — truck transportation. The stock has surged 37% in the past year. Landstar carries a Zacks Rank #2.

The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. The company is benefitting from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all segments.

Additionally, the company’s measures to reward its shareholders are encouraging. The stock has increased 1.5% in the past month. C.H. Robinson carries a Zacks Rank #2.