Analyst Thomas Fitzgerald CFA from TD Cowen reiterated a Hold rating on Allegiant Travel Company (ALGT – Research Report) and increased the price target to $87.00 from $70.00.
Thomas Fitzgerald CFA has given his Hold rating due to a combination of factors influencing the Allegiant Travel Company’s current and future market position. A key aspect of this decision is the company’s plan to increase utilization rates, which, while potentially beneficial, carries risks as seen in similar strategies by other airlines that have struggled with maintaining margins. The anticipated capacity growth in the upcoming quarters underscores this cautious stance, with potential RASM dilution being a concern.
Moreover, while the efforts to transition Sunseeker off the balance sheet and the expected positive EBITDA in the forthcoming quarters are positive steps, these factors still present uncertainties that weigh on the overall financial outlook. The company’s deleveraging strategy, including the sale of older aircraft and the anticipation of receiving new ones, is seen as a move towards financial health. However, Thomas Fitzgerald emphasizes the need for consistent execution and results before a more optimistic rating could be justified.
In another report released on February 5, Barclays also maintained a Hold rating on the stock with a $100.00 price target.
Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ALGT in relation to earlier this year.
