Alaska Air Group (ALK) analysts continue to submit bullish estimate revisions. Earnings are expected to double, but shares are still a good value.
Company Description
Alaska Air Group flies to almost 100 cities throughout North America. The company provides passenger, as well as freight services. Alaska Air is actually based in Seattle and has a market cap of $1.6 billion.
Unexpected Profit
While the Apr 22 earnings release fell 2 cents shy of the Zacks Conesus Estimate, there was enough good news to spur upward estimate revisions.
Alaska Air reported net income of $13.1 million, or 36 cents per share, up from a loss almost twice that size one year ago. Given the seasonality of the business, the company typically posts a loss for the quarter.
Earnings to Double
Following the news the Zacks Consensus Estimate for this year jumped to $5.07, up 55 cents. Next year’s projections are averaging $5.50, a $1.27 increase.
If Alaska Air Group reaches this level, earnings per share will have more than doubled, from $2.45 in 2009.
Shares of ALK are also trading with good valuations, even with the dramatic growth expectations. The stock’s forward P/E is less than 9 times and the PEG ratio is just 0.6.
Alaska Air Group is the top rated airliner. Transportation stocks are starting to show the benefits of the emerging consumer. As the economic outlook continues to improve, businesses and individuals are more willing to spend on travel.
The Chart
Shares and estimate can be volatile for ALK, but as you can see below, the overall trend is decisively higher. Each colored line shows the consensus for a particular year.
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