Shares of Alaska Air Group (NYSE:ALK) gained over 3% yesterday after the company revised its first-quarter guidance. The company now anticipates that Q1 adjusted loss per share will come between $0.45 and $0.55, lower than the loss of $0.62 reported in the year-ago quarter. The revised loss is lower than the loss of $1.16 per share expected by the analysts.
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Alaska Air is expected to report its first-quarter results on April 18.
Interestingly, the company gave better guidance despite the havoc caused by Boeing’s (BA) 737 MAX blowout incident. After a door plug panel detached mid-flight on January 5, ALK had to temporarily ground its Boeing 737 MAX 9 planes. This incident is expected to have negatively impacted the company’s bottom line by about $150 million.
Nevertheless, ALK revealed that the updated forecast includes the positive impact of partial compensation received from Boeing after the incident. Furthermore, the company noted that its Q1 performance was boosted by strategic network adjustments and strong travel demand.
Is ALK a Good Stock to Buy Now?
With seven Buy and two Hold recommendations, Alaska Air has a Strong Buy consensus rating. The analysts’ average price target on ALK stock of $47.33 implies 22.6% upside potential over the next 12 months. Shares of the company have declined by about 12% over the past year.
