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What's in Store for Allegiant (ALGT) This Earnings Season?

Zacks Equity Research
·4 min read

Allegiant Travel Company ALGT is scheduled to report second-quarter 2020 results on Jul 29, after market close.

Similar to the first quarter, second-quarter results are expected to reflect coronavirus-related adversities. In fact, travel-demand woes stemming from coronavirus are likely to have had a greater impact on Allegiant’s second-quarter performance than on its first. This is because air travel demand started slowing down mainly in March. Hence, the first quarter faced a limited impact while the second quarter bore the brunt of the meltdown in air travel demand.

With air travel demand significantly below year-ago levels amid coronavirus concerns, the company’s passenger revenues (accounting for approximately 90% of the top line) are expected to have taken a major hit. The Zacks Consensus Estimate for second-quarter passenger revenues indicates a 72.3% plunge from the year-ago reported number. The same for total revenues suggests a 74.4% decline from second-quarter 2019’s reported figure.

Due to suppressed travel demand, Allegiant reduced its second-quarter capacity significantly. The Zacks Consensus Estimate for second-quarter capacity (total system) hints at a 54.8% fall from second-quarter 2019’s reported figure.

With fuel costs accounting for a major chunk of airline expenditures, low fuel prices are anticipated to have partly mitigated the loss of revenues from coronavirus-related woes. Low fuel costs are expected to get reflected in the second-quarter bottom line. The Zacks Consensus Estimate for average fuel cost per gallon (total system) implies a 45.5% decline from the year-ago reported number.

Allegiant Travel Company Price and EPS Surprise

Allegiant Travel Company Price and EPS Surprise
Allegiant Travel Company Price and EPS Surprise

Allegiant Travel Company price-eps-surprise | Allegiant Travel Company Quote

Earnings Whispers

The proven Zacks model predicts an earnings beat for Allegiant in the second quarter of 2020. This is because the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Allegiant has an Earnings ESP of +23.25% as the Most Accurate Estimate is pegged at a loss of $3.48 while the Zacks Consensus Estimate stands at a loss of $4.53. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Allegiant carries a Zacks Rank #3.

Highlights of Q1 Earnings

In the last-reported quarter, the company delivered an earnings surprise of 253.5%. Quarterly revenues also beat the Zacks Consensus Estimate. However, both the top and bottom lines declined year over year with passenger revenues falling 9.8% due to low travel demand.

Other Stocks to Consider

Investors interested in the broader Transportation sector may also consider Expeditors International of Washington, Inc. EXPD, C.H. Robinson Worldwide, Inc. CHRW and Hawaiian Holdings, Inc. HA, as these stocks too possess the right combination of elements to beat on earnings this reporting cycle.

Expeditors has an Earnings ESP of +6.87% and a Zacks Rank of 3. The company will release second-quarter earnings numbers on Aug 4.

C.H. Robinson has an Earnings ESP of +6.02% and a Zacks Rank of 3. The company will announce second-quarter results on Jul 28.

Hawaiian Holdings has an Earnings ESP of +27.51% and a Zacks Rank #3. The company is set to announce second-quarter financial numbers on Jul 28.

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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
 
Hawaiian Holdings, Inc. (HA) : Free Stock Analysis Report
 
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Zacks Investment Research