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The firm concluded that the carrying value of Sunseeker Resort, including the Aileron golf course and related real estate, is no longer fully recoverable based on a detailed analysis of the estimated future cash flows and an independent third-party valuation of the resort and other assets.
Allegiant Travel Company (ALGT) disclosed in an SEC filing that it will record a non-cash impairment charge worth $322 million during the fourth quarter of fiscal year 2024.
The decision to take the impairment follows the management’s review of the value of its assets.
The firm concluded that the carrying value of Sunseeker Resort, including the Aileron golf course and related real estate, is no longer fully recoverable based on a detailed analysis of the estimated future cash flows and an independent third-party valuation of the resort and other assets.
Allegiant expects the impairment charge to be recorded as a special charge within the fourth quarter of 2024 financial statements.
“This non-cash accounting charge will not impact the company’s cash flow, nor will it affect the company’s plans to continue operating the Resort,” it said.
Allegiant also indicated that in the coming weeks, it will prepay the outstanding debt secured by the resort, in its entirety.
Both the debt repayment and the impairment charge are part of the firm’s ongoing process of exploring strategic alternatives for the Resort, including a potential sale or stake sale.
On Stocktwits, retail sentiment continued to trend in the ‘extremely bullish’ territory (77/100) accompanied by high retail chatter.
Recently, Bank of America raised the firm's price target on Allegiant Travel to $95 from $54 while keeping an ‘Underperform’ rating on the shares.
Barclays, too, raised the firm's price target on the stock to $100 from $85 while keeping an ‘Overweight’ rating on the shares.
Allegiant shares have gained over 14% year-to-date, while the stock has risen nearly 34% over the past year.
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