Alaska Air Stock Flies High After Investor Day Sparks Price Target Hikes: Retail Stays Hopeful
By Stocktwits Inc | First Published Dec 12, 2024, 12:35 AM ISTBank of America reportedly raised its price target on the stock to $70 from $60, while keeping a ‘Buy’ rating. JPMorgan too raised its price target on Alaska Air to $85 from $58, while keeping an ‘Overweight’ rating.
Shares of Alaska Air Group, Inc. (ALK) rose over 3% on Wednesday after it received a slew of price target hikes following the firm’s investor day on Tuesday.
Bank of America reportedly raised its price target on the stock to $70 from $60, while keeping a ‘Buy’ rating. The brokerage said Alaska Air’s investor day targets did not disappoint and that its 2025 EPS guidance, revised synergies, and network opportunities around the combined Hawaiian entity are meaningfully better than expected.
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On Tuesday, Alaska Air unveiled its three-year strategic plan, “Alaska Accelerate,” intended to deliver a billion dollars in incremental profit following its merger with Hawaiian Airlines.
The firm’s new financial targets for 2027 include a billion dollars in incremental profits, earnings per share of at least $10, double-digit pretax profit margins of 11-13%, no margin dilution in the first year following the merger, and synergy estimates doubled to at least $500 million.
Meanwhile, JPMorgan too raised its price target on Alaska Air to $85 from $58, while keeping an ‘Overweight’ rating. The firm stated that Alaska's first proforma guide comfortably supports its year-end 2025 price target of $85 and added that the airline’s underlying drivers appear to be reasonably achievable.
Morgan Stanley, too, raised its price target on the stock to $90 from $70, while keeping an ‘Overweight’ rating. The brokerage sees demand remaining resilient, with volume growth and premium mix strength continuing.
For 2025, Alaska Air Group expects capacity to grow by 2% to 3% and earnings per share of at least $5.75. The firm also anticipates capital expenditure of $1.4 billion to $1.5 billion and sees share repurchases of approximately $250 million.
Chief commercial officer Andrew Harrison highlighted that the firm expects unprecedented revenue growth at Alaska Air over the next three years.
Amidst all the optimism, retail sentiment on Stocktwits inched lower into the ‘bullish’ territory (59/100) from ‘extremely bullish’ a day ago, supported by high retail chatter.
Retail investors are taking note of the investor day conference and the chatter shows the prevailing optimism surrounding the stock.
Shares of Alaska Air has gained over 64% on a year-to-date basis.
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