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Melius optimistic on US airlines shares amid structural changes

EditorNatashya Angelica
Published 02/12/2024, 11:06 pm
ULCC
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In summary, Melius maintains a positive view on the U.S. airline industry shares, emphasizing the sector's promising setup for the remainder of 2024. The firm's commentary underscores the importance of structural changes and FCF generation, alongside a positive demand outlook and improving supply dynamics, as key drivers of the industry's future success.

Looking at Frontier Airlines specifically, InvestingPro data indicates a projected revenue growth of 4% for FY2024, with analysts maintaining a consensus hold recommendation and a price target range of $4-$10. Looking at Frontier Airlines specifically, InvestingPro data indicates a projected revenue growth of 4% for FY2024, with analysts maintaining a consensus hold recommendation and a price target range of $4-$10.

In summary, Melius maintains a positive view on the U.S. airline industry, emphasizing the sector's promising setup for the remainder of 2024. The firm's commentary underscores the importance of structural changes and FCF generation, alongside a positive demand outlook and improving supply dynamics, as key drivers of the industry's future success.

Looking at Frontier Airlines specifically, InvestingPro data indicates a projected revenue growth of 4% for FY2024, with analysts maintaining a consensus hold recommendation and a price target range of $4-$10.

Melius' comments come at a time when the U.S. airline industry is navigating through a period of change, with the potential for increased profitability and efficiency. The firm's outlook suggests confidence in the industry's ability to capitalize on these changes and generate significant free cash flow in the future.

The firm's analysis indicates that while the airline stocks have experienced recent price movements, the underlying industry fundamentals remain solid. This perspective encourages viewing any market pullbacks as chances to gain exposure to the airline sector, which Melius believes is on the cusp of beneficial structural shifts.

In summary, Melius maintains a positive view on the U.S. airline industry, emphasizing the sector's promising setup for the remainder of 2024. The firm's commentary underscores the importance of structural changes and FCF generation, alongside a positive demand outlook and improving supply dynamics, as key drivers of the industry's future success.

In other recent news, Frontier Group Holdings (NASDAQ:ULCC) Inc witnessed financial improvements as forecasted by UBS, which set the company's shares at Neutral. The firm expects Frontier's revenue per available seat mile (RASM) to increase due to the maturing of new markets and routes, particularly in 2025 and 2026.

Frontier's growth is further predicted to be supported by its new offerings, UpFront Plus and BizFare, and reduced competition as rivals cut back their capacity. However, UBS also anticipates Frontier will face cost pressures, particularly from increased aircraft rent and reduced gains from sale-leaseback transactions.

In more recent developments, Frontier Communications (OTC:FTRCQ) Parent, Inc. reported Q3 2024 results, which missed earnings expectations but beat revenue forecasts. The company experienced a loss of $0.33 per share, surpassing the projected loss of $0.19 per share, but generated revenue of $1.49 billion, exceeding the consensus estimate of $1.46 billion.

Frontier also added 108,000 fiber broadband customers in Q3, increasing its total fiber broadband customer base to 2.3 million. The company's fiber network expanded to reach 7.6 million total locations passed, a growth of 381,000 from the last quarter.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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