Alaska Air Group (ALK) delivered better-than-expected Q3 2021 results as the airline continued to make significant strides to recover from COVID-19 disruptions, with the company bouncing back to profitability. Despite the upbeat results, ALK shares fell 1.83% to close at $56.20 on October 22.
Alaska Air is a U.S. airline that offers passenger and cargo air transportation services. The airline operates through Mainline, Regional, and Horizon segments and flies to over 100 destinations.
Net income for the quarter climbed to $187 million compared to an adjusted net loss of $399 million delivered in the same quarter last year. Adjusted EPS of $1.47 compared to a loss of $3.23 per share delivered in the same quarter last year and came in above consensus estimates of $1.29.
Revenue, on the other hand, landed at $1.95 billion, up 179% year-over-year and above consensus estimates of $1.93 billion. During the quarter, the airline repaid $425 million in debt, bringing its total debt payments for the year to $1.2 billion. (See Top Smart Score Stocks on TipRanks)
Additionally, Alaska Air Group made important strides in strengthening its fleet, exercising options for 12 Boeing 737-9 aircraft, slated for delivery in 2023 and 2024.
Recently, J.P. Morgan analyst Jamie Baker reiterated a Buy rating on Alaska Air Group and raised the price target to $97 from $94, implying 72.60% upside potential to current levels. According to the analyst, the equity push in the U.S. airlines sector has room to run amid the relaxation of U.S. borders restrictions.
Consensus among analysts is a Strong Buy based on 7 Buys. The average Alaska Air Group price target of $82.29 implies 46.42% upside potential to current levels.
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