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Strength Seen in Alaska Air (ALK): Can Its 13.2% Jump Turn into More Strength?
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Alaska Air Group (ALK - Free Report) shares rallied 13.2% in the last trading session to close at $61.29. 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 4.5% gain over the past four weeks.
The uptick was owing to the bullish guiance given by the company for fourth-quarter 2024 on strong holiday travel demand. The airline registered its biggest one-day gain in more than four years. ALK now expects to report fourth-quarter adjusted per-share earnings in a range of 40-50 cents, up from previous guidance of 20 cents to 40 cents. Revenue per available seat miles is now expected to rise in the mid-to-high single digits, compared with prior guidance of up by mid single digits. In a shareholder-friendly move, ALK's board approved a share buyback program of up to $1 billion. ALK also outlined a three-year plan (Alaska Accelerate) to deliver $1 billion in profit following the closure of the merger with Hawaiian Airlines earlier this year. The plan is expected to result in short and long-term value creation to drive double-digit margins of 11% to 13% apart from boosting EPS to at least $10 by 2027. ALK expects synergies from the acquisition to double to at least $500 million by 2027.
This airline is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of +20%. Revenues are expected to be $3.44 billion, up 34.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Alaska Air, the consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ALK going forward to see if this recent jump can turn into more strength down the road.
Alaska Air is part of the Zacks Transportation - Airline industry. United Airlines (UAL - Free Report) , another stock in the same industry, closed the last trading session 0.5% higher at $96.53. UAL has returned 7.4% in the past month.
For United, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.96. This represents a change of +48% from what the company reported a year ago. United currently has a Zacks Rank of #2 (Buy).
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Strength Seen in Alaska Air (ALK): Can Its 13.2% Jump Turn into More Strength?
Alaska Air Group (ALK - Free Report) shares rallied 13.2% in the last trading session to close at $61.29. 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 4.5% gain over the past four weeks.
The uptick was owing to the bullish guiance given by the company for fourth-quarter 2024 on strong holiday travel demand. The airline registered its biggest one-day gain in more than four years. ALK now expects to report fourth-quarter adjusted per-share earnings in a range of 40-50 cents, up from previous guidance of 20 cents to 40 cents. Revenue per available seat miles is now expected to rise in the mid-to-high single digits, compared with prior guidance of up by mid single digits. In a shareholder-friendly move, ALK's board approved a share buyback program of up to $1 billion. ALK also outlined a three-year plan (Alaska Accelerate) to deliver $1 billion in profit following the closure of the merger with Hawaiian Airlines earlier this year. The plan is expected to result in short and long-term value creation to drive double-digit margins of 11% to 13% apart from boosting EPS to at least $10 by 2027. ALK expects synergies from the acquisition to double to at least $500 million by 2027.
This airline is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of +20%. Revenues are expected to be $3.44 billion, up 34.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Alaska Air, the consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ALK 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 >>>>
Alaska Air is part of the Zacks Transportation - Airline industry. United Airlines (UAL - Free Report) , another stock in the same industry, closed the last trading session 0.5% higher at $96.53. UAL has returned 7.4% in the past month.
For United, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.96. This represents a change of +48% from what the company reported a year ago. United currently has a Zacks Rank of #2 (Buy).