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Frontier Group (ULCC) Stock Jumps 10.5%: Will It Continue to Soar?

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Frontier Group Holdings (ULCC - Free Report) shares rallied 10.5% in the last trading session to close at $9.14. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.1% gain over the past four weeks.

The uptick was mainly owing to the buy rating maintained by an analyst from Citi on ULCC. Moreover, ULCC recently inked an agreement with JetBlue (JBLU - Free Report) . Per the agreement, JBLU will divest all the holdings of Spirit Airlines (SAVE - Free Report) at New York’s LaGuardia Airport to Frontier in the event of JBLU's impending takeover of SAVE materializing. Per Robin Hayes, the chief executive officer of JetBlue "We are pleased that this agreement with Frontier will maintain the same level of ultra low-cost carrier service at LaGuardia Airport." The agreement has also found favor with investors.

This discount airline is expected to post quarterly earnings of $0.27 per share in its upcoming report, which represents a year-over-year change of +200%. Revenues are expected to be $973.43 million, up 7.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Frontier Group, the consensus EPS estimate for the quarter has been revised 13% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ULCC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Frontier Group is a member of the Zacks Transportation - Airline industry. One other stock in the same industry, Delta Air Lines (DAL - Free Report) , finished the last trading session 1.7% higher at $37.01. DAL has returned 10% over the past month.

For Delta, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.05. This represents a change of +42.4% from what the company reported a year ago. Delta currently has a Zacks Rank of #3 (Hold).

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