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Allegiant Travel (ALGT) Down 24.4% Year to Date: What Ails It?
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Shares of Allegiant Travel Company (ALGT - Free Report) have been downtrending disappointingly on the bourses of late, declining 24.4% so far this year compared with its industry’s 15.7% fall.
Image Source: Zacks Investment Research
Let’s delve into the reasons for this unimpressive price performance and examine if it is likely to struggle in the near term as well.
Rising fuel costs pose a threat to Allegiant Travel’s bottom line. Average fuel cost per gallon (scheduled) rose 43.9% year over year in 2021. Given the recent phenomenal increase in oil price, fuel costs are likely to be high in the first quarter of 2022 as well, which in turn might hurt the carrier’s bottom line. Rising expenses due to salary and benefits (up 28.3% in 2021) are also denting ALGT’s bottom line and are likely to do so in first-quarter 2022 as well.
Moreover, Allegiant Travel’s total operating revenues are still below the pre-COVID levels (2019 levels) despite the recent improvement. Evidently, operating revenues declined 7.2% to $1.71 billion in 2021 from the 2019 actuals. Passenger revenues also declined 6.2% to $1.58 billion during the said time period. Omicron-induced disruptions might affect ALGT’s first-quarter performance.
The pessimism surrounding the stock, currently carrying a Zacks Rank #5 (Strong Sell), is evident from the Zacks Consensus Estimate for current-quarter and current-year earnings being revised 65.6% and 21.7% downward, respectively, over the past 60 days.
ArcBest currently sports a Zacks Rank of 1 (Strong Buy). ARCB has a stellar surprise history. Its earnings outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 31.4%.
Shares of ArcBest have rallied 14.4% in the past six months. Improving freight conditions in the United States bode well for ARCB. Solid customer demand and higher market rates are supporting growth at ARCB.
Ryder System is benefiting from improving economic and freight market conditions in the United States. R’s measures to reward its shareholders through dividends and share buybacks are encouraging. In February 2022, R entered into a $300-million accelerated share repurchase program, which will run through October 2022.
Ryder sports a Zacks Rank #1, currently. Its shares have gained 2.9% in a year’s time. The Zacks Consensus Estimate for current-year earnings has risen 30.9% over the past 60 days.
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Allegiant Travel (ALGT) Down 24.4% Year to Date: What Ails It?
Shares of Allegiant Travel Company (ALGT - Free Report) have been downtrending disappointingly on the bourses of late, declining 24.4% so far this year compared with its industry’s 15.7% fall.
Image Source: Zacks Investment Research
Let’s delve into the reasons for this unimpressive price performance and examine if it is likely to struggle in the near term as well.
Rising fuel costs pose a threat to Allegiant Travel’s bottom line. Average fuel cost per gallon (scheduled) rose 43.9% year over year in 2021. Given the recent phenomenal increase in oil price, fuel costs are likely to be high in the first quarter of 2022 as well, which in turn might hurt the carrier’s bottom line. Rising expenses due to salary and benefits (up 28.3% in 2021) are also denting ALGT’s bottom line and are likely to do so in first-quarter 2022 as well.
Moreover, Allegiant Travel’s total operating revenues are still below the pre-COVID levels (2019 levels) despite the recent improvement. Evidently, operating revenues declined 7.2% to $1.71 billion in 2021 from the 2019 actuals. Passenger revenues also declined 6.2% to $1.58 billion during the said time period. Omicron-induced disruptions might affect ALGT’s first-quarter performance.
The pessimism surrounding the stock, currently carrying a Zacks Rank #5 (Strong Sell), is evident from the Zacks Consensus Estimate for current-quarter and current-year earnings being revised 65.6% and 21.7% downward, respectively, over the past 60 days.
Stocks to Consider
Investors interested in the Zacks Transportation sector may consider stocks like ArcBest Corporation (ARCB - Free Report) and Ryder System (R - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcBest currently sports a Zacks Rank of 1 (Strong Buy). ARCB has a stellar surprise history. Its earnings outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 31.4%.
Shares of ArcBest have rallied 14.4% in the past six months. Improving freight conditions in the United States bode well for ARCB. Solid customer demand and higher market rates are supporting growth at ARCB.
Ryder System is benefiting from improving economic and freight market conditions in the United States. R’s measures to reward its shareholders through dividends and share buybacks are encouraging. In February 2022, R entered into a $300-million accelerated share repurchase program, which will run through October 2022.
Ryder sports a Zacks Rank #1, currently. Its shares have gained 2.9% in a year’s time. The Zacks Consensus Estimate for current-year earnings has risen 30.9% over the past 60 days.