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SkyWest stock seen as top pick for SMIDcap value managers as 3Q24 results approach

EditorAhmed Abdulazez Abdulkadir
Published 10/03/2024, 08:46 PM
SKYW
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On Thursday, TD Cowen upheld its Buy rating and $95.00 price target for SkyWest (NASDAQ: NASDAQ:SKYW), expressing confidence in the airline's performance. The firm anticipates that SkyWest will announce its third-quarter results for 2024 in the latter part of next week, with expectations set higher than the consensus. The endorsement comes with a strong belief that SkyWest remains an attractive stock for small to mid-cap value investors.

The analyst from TD Cowen highlighted that current schedules indicate an increase in block hours for the fourth quarter of 2024 and the first quarter of 2025, which could lead to positive surprises in the management's forward-looking statements. This outlook suggests that the upcoming period could yield favorable developments for the company.

SkyWest's potential to outperform market expectations is backed by the firm's conviction in its long-term thesis. The analyst's comments reflect a positive sentiment towards the airline's future financial results and operational performance.

The company, known for its regional airline services, is positioned by TD Cowen as a top pick in its category. The firm's sustained Buy rating and price target underscore a continued endorsement of SkyWest's stock for investors seeking value in the small to mid-cap sector.

In other recent news, SkyWest has been making noteworthy strides in the aviation industry. The company reported a successful second quarter of 2024, with a net income of $76 million and revenue of $867 million. SkyWest also expanded its fleet, integrating 8 new United Finance E175s and launching their first CRJ550 and Delta prorate operation.

TD Cowen, in recent meetings with SkyWest's executives, maintained a positive outlook on the company, reiterating a Buy rating. The firm recognized SkyWest's potential for growth and efficiency, emphasizing the company's long-term growth drivers, including the optimization of asset utilization and the return of prorate flying in smaller markets.

Looking ahead, SkyWest anticipates an increase in block hours and full fleet utilization by year's end, as well as growth in their charter and prorate operations. The company's executives have outlined strategic plans to enhance service in underserved communities. They also expect a 9% to 11% increase in 2024 block hours compared to the previous year, and the addition of 278 E175s to the fleet by 2026.

InvestingPro Insights

SkyWest's recent performance aligns with TD Cowen's optimistic outlook. According to InvestingPro data, the company's revenue growth of 10.41% over the last twelve months and a significant 19.5% growth in the most recent quarter underscore its strong operational momentum. This growth trajectory supports the analyst's expectations for increased block hours and potential positive surprises in the upcoming earnings report.

InvestingPro Tips highlight that SkyWest's net income is expected to grow this year, and analysts predict the company will be profitable. These insights corroborate TD Cowen's bullish stance on the stock. Additionally, SkyWest has demonstrated a strong return over the last month, with a 12.52% price total return, and an impressive 110.67% return over the past year, reinforcing its appeal to value investors as suggested in the article.

It's worth noting that InvestingPro offers 11 additional tips for SkyWest, providing investors with a comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable for those looking to make informed decisions based on a broader range of metrics and expert observations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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