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Allegiant (ALGT) Stock Tanks 41.5% in a Month: Here's Why
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Shares of Allegiant Travel Company (ALGT - Free Report) have lost 41.5% compared with the industry’s 40.3% decline in the past month.
Alike most of its peers, Allegiant has been hit hard by its flagging fortunes due to the sharp drop in air-travel demand in the wake of the coronavirus outbreak, which marred its prospects in the process.
Coronavirus Doldrums Hamper Allegiant’s Prospects
Due to the coronavirus-induced vanishing demand for leisure travel, Allegiant plans to reduce capacity by 15% for April and May. In fact, the company expects deeper capacity cuts (between 30% and 35%) in the coming days as demand is likely to face significant erosion moving ahead.
Allegiant apart, other carriers, namely JetBlue Airways (JBLU - Free Report) , Alaska Air (ALK - Free Report) and Spirit Airlines (SAVE - Free Report) trimmed capacity following feeble demand due to the COVID-19 hazard.
Additionally, to tackle this unprecedented crisis, Allegiant suspended its quarterly dividend payouts and buybacks. It is also looking to curtail costs on account of depleting revenues. Some cost-cutting measures include freezing recruitment and halting construction of the Florida resort. Also, Allegiant’s high-debt levels are worrisome.
Southbound Estimate Revisions
The bearish sentiment surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised 50.6% downward in the past 60 days to $8.52.
Additionally, Allegiant carries a Zacks Rank #5 (Strong Sell).
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Allegiant (ALGT) Stock Tanks 41.5% in a Month: Here's Why
Shares of Allegiant Travel Company (ALGT - Free Report) have lost 41.5% compared with the industry’s 40.3% decline in the past month.
Alike most of its peers, Allegiant has been hit hard by its flagging fortunes due to the sharp drop in air-travel demand in the wake of the coronavirus outbreak, which marred its prospects in the process.
Coronavirus Doldrums Hamper Allegiant’s Prospects
Due to the coronavirus-induced vanishing demand for leisure travel, Allegiant plans to reduce capacity by 15% for April and May. In fact, the company expects deeper capacity cuts (between 30% and 35%) in the coming days as demand is likely to face significant erosion moving ahead.
Allegiant apart, other carriers, namely JetBlue Airways (JBLU - Free Report) , Alaska Air (ALK - Free Report) and Spirit Airlines (SAVE - Free Report) trimmed capacity following feeble demand due to the COVID-19 hazard.
Additionally, to tackle this unprecedented crisis, Allegiant suspended its quarterly dividend payouts and buybacks. It is also looking to curtail costs on account of depleting revenues. Some cost-cutting measures include freezing recruitment and halting construction of the Florida resort. Also, Allegiant’s high-debt levels are worrisome.
Southbound Estimate Revisions
The bearish sentiment surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised 50.6% downward in the past 60 days to $8.52.
Additionally, Allegiant carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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