Most brokerage firm research reports go dark about a week before Christmas. That does not mean that analysts are not making changes to their views on stocks and sectors for the year ahead. Raymond James analyst Savanthi Syth sees big upside for some of the air carriers in 2025.
The timing of Monday’s upside calls came when the broad market indexes were soft and were on the heels of some tragic crashes overseas in recent days. These calls are also two days before the New Years Day market closure on Wednesday.
Monday’s price target hikes in the airline stocks were factoring in a modest increase in their earnings/EBIT/EV multiples and also as the firm shifts to 2025 as the base period. The firm sees Alaska Air, Allegiant, American and JetBlue being the best positioned airline stocks ahead of the fourth quarter earnings reports.
Oggonomics always reminds investors and its readers that no single analyst report should ever be the sole basis to buy or sell a stock or a sector. That decision to buy or sell (or to hold or short sell) is up to each investor and that decision should be made with a financial advisor. All of the ratings and price targets issued in this report come from Raymond James.
Allegiant Travel Company (NASDAQ: ALGT) was reiterated as Outperform and its target was raised to $110 from $75 in the Raymond James call. After closing down 0.3% at $91.11 on Friday, it was indicated down 4.5% at $87.00 on Monday — implying upside over 26% even before its 3.8% dividend yield. Allegiant may have doubled from its lows this summer, but the stock was up just 10% ahead of this call. Its $83.00 consensus analyst target price was also below the current share price.
American Airlines Group Inc. (NASDAQ: AAL) may have suffered a ground stop for all of its flights right as Christmas was kicking off, but just as the busy Christmas Eve travel day, but the impact of the flight delays was not really seen in its stock after the initial drop. In fact, its shares closed at $17.35 last Friday for a gain of 2.7% versus the prior Friday’s close. Raymond James has now raised American Airlines to Outperform from Market Perform and it assigned a $24 price target. This represents implied upside of 38% if its scenario plays out. Its shares were indicated down about 0.5% at $17.25 ahead of the call. American Airlines shares were up about 26% YTD and its consensus price target was $18.57 ahead of this call.
Delta Air Lines (NYSE: DAL) was reiterated as Outperform with a $75 price target, implying about 22% if the Raymond James thesis pans out. Delta remains the top pick of the sector for a medium to long-term basis based on its attractive risk/reward view. Delta shares have risen 52% YTD and its consensus price target was $78.56.
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SkyWest, Inc. (NASDAQ: SKYW) closed down 2.4% at $101.26 last Friday and was indicated down 2.2% at $99.05 on Monday. Raymond James reiterated its Outperform rating and raised its target to $120 from $114 in the call. SkyWest was up a sharp 94% YTD and its consensus price target was $122.25.
Southwest Airlines Co. (NYSE: LUV) was reiterated as Outperform and its price target was raised to $40 from $36 by Raymond James. This represents an implied upside of almost 18% if the analyst thesis pans out, or almost 20% if Southwest’s 2.1% dividend yield is included. Southwest was indicated down 1% at $33.70 on Monday. Southwest is up about 18% YTD and its consensus price target of $32.14 was below the current price.
United Airlines Holdings, Inc. (NYSE: UAL) was reiterated as Outperform and its price target was raised to $120 from $90 in the call. This represents about 21% upside from the prior $99.65 close. It was indicated down at $98.25 on Monday. United’s stock was last seen up a whopping 141% so far in 2024 and its consensus price target was $117.50 ahead of the call.
Again, all ratings and price targets in this report were issued by Raymond James. Consensus analyst price targets were from Finviz. Oggonomics does not have its own ratings nor does it maintain any formal price targets for the companies mentioned in this report.
