On Wednesday, Melius Research maintained a positive outlook on Alaska Air (NYSE:ALK), reiterating a Buy rating and a $72.00 price target for the airline's shares. The firm's analyst highlighted Alaska Air as a standout in the U.S. domestic airline sector, suggesting it might be one of the most underappreciated companies in the travel industry.
The analyst's comments underscored the potential for Alaska Air's earnings to double over the next three years, which could lead to a reevaluation of the company's current market valuation. The assertion is that even if Alaska Air achieves only 80% of its projected targets, the share price could reach into the triple digits, up from its current price of $61.
The endorsement of Alaska Air's stock comes after a notable 13% surge in its share price on Tuesday. The firm encourages investors to continue focusing on Alaska Air, as it believes the airline is at the beginning of a positive revision cycle.
The analyst also pointed to several factors that could contribute to Alaska Air's success, including reasonable synergy expectations, network potential, and the broader airline industry's efforts to improve margins. These elements position Alaska Air to potentially outperform its peers in the sector.
In summary, Melius Research's outlook for Alaska Air is based on a combination of the airline's strong performance potential and the broader industry dynamics that could favor the company's growth and market reevaluation.
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