Thomas Fitzgerald CFA, an analyst from TD Cowen, reiterated the Hold rating on Allegiant Travel Company (ALGT – Research Report). The associated price target was raised to $50.00.
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Thomas Fitzgerald CFA’s rating is based on a combination of factors that reflect both positive developments and ongoing challenges for Allegiant Travel Company. The company reported stronger-than-expected earnings for the first quarter of 2025, surpassing both the analyst’s and consensus estimates. However, the guidance for the second quarter was less optimistic due to weaker revenue per available seat mile (RASM). Despite this, management remains optimistic about the benefits of increasing the number of MAX aircraft in their fleet and enhancing the mix of premium seating, which is expected to improve ancillary revenue performance.
While Allegiant is taking steps to optimize its operations, such as moderating available seat miles (ASMs) and focusing on structural cost initiatives, the abrupt changes in demand have posed challenges. The company has been unable to adjust its capacity for April but is making strategic cuts for off-peak days in the coming months. Additionally, the utilization rates of aircraft are expected to be lower than pre-pandemic levels. Although the performance of the MAX aircraft and other initiatives like the Allegiant Extra product and co-branded credit card are promising, these factors collectively justify a Hold rating as the company navigates through these mixed signals.
In another report released on May 8, Barclays also maintained a Hold rating on the stock with a $52.00 price target.