2023-04-03 08:12:57 ET
Alaska Airlines ( NYSE: ALK ) and SkyWest ( SKYW ) each saw ratings hikes at Raymond James on Monday.
The two airline stocks were upgraded given falling costs, resilient demand, and stubbornly pessimistic consensus estimates. The continuation of strong travel demand is set to drive upside for both names, according to the firm’s analysts. A
“Our 2023 estimates mostly move higher primarily due to a lowered fuel price forecast, albeit still above the forward curve. Given the high level of uncertainty, we continue to reflect a moderation in demand despite no signs so far, albeit slightly pushed out vs. our prior view,” the team wrote. “We continue to believe airline stocks would perform well in a shorter and/or shallower downturn scenario (albeit, perhaps not in the very near term).”
Alaska Airlines ( ALK ) was raised to Strong Buy and SkyWest ( SKYW ) was hiked to Market Perform. SkyWest ( SKYW ) is somewhat derisked ahead of its peak summer season, moving the team off of its prior Underperform rating. Alaska is likewise expected to see accelerating demand into the spring and summer, while also benefiting from a fleet transition.
Read more on recent airline bookings data .
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Alaska Airlines upgraded to ‘Strong Buy’ at Raymond James