Incorporating the latest investor update, Goldman Sachs (NYSE:GS) has updated its December quarter EPS estimate for Allegiant to $2.15, up from the prior estimate of $0.85. Despite the enhanced earnings forecast, the firm's 12-month price target for Allegiant remains unchanged at $83.00.
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For deeper insights into Allegiant's financial health and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company's performance metrics, valuation, and growth potential among 1,400+ top US stocks.
The adjustment in EPS guidance is attributed to stronger performance by the airline, which now anticipates an airline-only EPS between $2.50 and $3.00, compared to the earlier estimate of $0.50 to $1.50. This positive shift is partially balanced by an expanded projected loss for its Sunseeker resort, with the anticipated net loss per share widening from ($0.50) to ($0.75). InvestingPro data reveals the company operates with a significant debt burden, maintaining a debt-to-equity ratio of 1.75 and a concerning current ratio of 0.75, indicating potential liquidity challenges.
The improvement in the airline's financial outlook is primarily due to better-than-expected unit revenue and a one-time gain from engine sales, contributing approximately $0.85 and $0.65 to the $1.75 increase in airline-only EPS guidance, respectively. Additionally, airline-only unit cost, excluding fuel, saw an 80 basis point year-over-year improvement, contributing to the overall positive performance.
Regarding revenue, Allegiant has revised its expectations for December quarter revenue per available seat mile (RASM), forecasting a decrease of 1.5% year-over-year instead of the previously projected 4.5% drop. This improvement is driven by robust last-minute holiday bookings and a swifter recovery in markets affected by hurricanes.
Incorporating the latest investor update, Goldman Sachs has updated its December quarter EPS estimate for Allegiant to $2.15, up from the prior estimate of $0.85. Despite the enhanced earnings forecast, the firm's 12-month price target for Allegiant remains unchanged at $83.00.
In other recent news, Allegiant Travel Company (NASDAQ:ALGT) anticipates an improvement in Q4 earnings and operating margins, bolstered by recent booking trends and operational adjustments.
The company has also updated its guidance for the fourth quarter of 2024, reflecting an increase in earnings and a decrease in total revenue per available seat mile (TRASM). Allegiant has acquired two additional 737-MAX aircraft, surpassing initial projections and contributing to operational efficiencies.
Allegiant reported a slight dip in its third-quarter revenue to $562.2 million, despite a 20% increase in its loyalty programs and ancillary revenue initiatives. Recent developments include a decrease in passenger traffic and revenue passenger miles, largely due to the impact of hurricanes. Allegiant's pilots, represented by the Teamsters union, voted in favor of a strike to negotiate better compensation and work conditions, potentially affecting pilot retention and aircraft utilization.
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