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Why Allegiant (ALGT) Stock Hit a New 52-Week High on Friday

Zacks Equity Research

Shares of Allegiant Travel Company ALGT attained a new 52-week high of $168.28 during the trading session on Oct 25, before retracing a bit to close at $166.18, which was 7.6% higher than Oct 24’s closing price.

The reason for this uptick in the company’s share price was the strong third-quarter 2019 results. Let’s delve deeper.

This transportation company’s earnings of $2.7 per share surpassed the Zacks Consensus Estimate of $2.21. Moreover, the bottom line soared more than 100% year over year, driven by lower fuel costs and higher revenues. Total operating revenues grew 11% year over year to $436.5 million on the back of a 10.2% rise in passenger revenues. Moreover, the top line surpassed the consensus mark of $429.4 million.

Notably, quarterly earnings (airline operations) increased significantly to $3.06 per share.

Allegiant Travel Company Price, Consensus and EPS Surprise

 

Allegiant Travel Company Price, Consensus and EPS Surprise

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

Quarter in Details

Air traffic (measured in revenue passenger miles: RPMs) for scheduled service in the quarter under review rose 6.1% and capacity (measured in available seat miles: ASMs) grew 5.8% year over year. Load factor (percentage of seats filled by passengers) was 86%, up 30 basis points, as capacity expansion was outweighed by traffic growth.

Airline operating cost per available seat miles (CASM) excluding fuel fell 5.6%. Average fuel cost per gallon (scheduled) declined 10% to $2.17 in the quarter. Moreover, total scheduled service passenger revenue per available seat miles (TRASM) increased 4.3% to 11.1 cents.

In the quarter under review, Allegiant rewarded shareholders with dividends worth $11 million and bought back shares worth $14.7 million. Furthermore, the board of directors has cleared a dividend payout of 70 cents per share, which is payable on Dec 12, 2019, to shareholders of record as of Nov 22.

2019 Outlook

The company now expects scheduled and system ASMs to increase between 8.5% and 8.9% each (old guidance: 8-9%). The company now expects non-fuel unit costs (airline) to decline between 3.3% and 3.9% (earlier outlook had called for a decline in the 3-4% range).

The company still expects fuel cost per gallon of $2.15. Additionally, the effective tax rate is anticipated between 23% and 24%.

This Zacks Rank #3 (Hold) company now expects earnings per share of $14.25-$14.75 (earlier guidance: $13.50-$14.25) for the current year. The Zacks Consensus Estimate for the same is pegged at $13.82.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the Zacks Airline industry are awaiting third-quarter results from key players like SkyWest SKYW, GOL Linhas GOL and Copa Holdings CPA.

While SkyWest will report third-quarter earnings numbers on Oct 30, GOL Linhas and Copa Holdings will announce the same on Oct 31 and Nov 13, respectively.

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Allegiant Travel Company (ALGT) : Free Stock Analysis Report
 
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
 
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