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Alaska Air Orders 23 New Boeing 737 MAX Jets; Street Sees 9% Upside
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Alaska Air Orders 23 New Boeing 737 MAX Jets; Street Sees 9% Upside

Alaska Air announced on Tuesday that it has agreed to buy an additional 23 Boeing 737 MAX aircraft. With this order, the airline intends to replace its older Airbus A320 aircraft fleet, which it had adopted following the acquisition of Virgin America in 2016.

Alaska Air (ALK) said that the order, including the 737-9 model of MAX series aircraft, will enable it to move “toward a more efficient, all-Boeing mainline fleet.” According to the company, “The 737-9 is a member of the 737 MAX family that is designed to offer more fuel efficiency, reliability and flexibility in the single-aisle airplane market.”

The new deal will boost Alaska Air’s total order to 68 Boeing (BA) 737 MAX jets. The company also has an option to buy an additional 52 aircraft.

Brad Tilden, CEO of Alaska Air said, “We believe in this airplane, we believe in our strong partnership with Boeing, and we believe in the future of Alaska Airlines and the incredible opportunities ahead as we climb our way out of this pandemic.” (See ALK stock analysis on TipRanks)

On Nov. 30, Raymond James analyst Savanthi Syth raised the stock’s price target to $65 (29.1% upside potential) from $50 and reiterated a Buy rating. In a note to investors, Syth said that the stock’s risk-reward scenario looks compelling given the air carrier’s low-cost and capital-efficient operations and domestic focus.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 6 Buys and 3 Holds. The average price target stands at $55 and implies upside potential of about 9.2% to current levels. Shares have fallen 25.7% year-to-date.

Related News:
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Lockheed Martin Snaps Up Aerojet Rocketdyne For $4.4B; Street Sees 17% Upside
Boeing Wins Fourth Contract With Singapore Air Force; Shares Down 33% YTD

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