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How much does Alaska Air Group (ALK) profit from the current surge in air travel?

Alaska Air Group Among Top Airline Stocks Benefiting From Travel Boom

We recently compiled a list of the Top 10 Airline Stocks Benefiting From The Air Travel Boom. In this article, we are going to take a look at where Alaska Air Group (NYSE:ALK) stands against the other airline stocks.

The aviation sector has seen a resurgence of optimism as air travel demand reached pre-covid levels and the holiday season showed promise. Delta Airlines recently announced its Q4 earnings, surprising investors with improved operating margins of 12% compared to 9.9% a year ago. This positive news has led to a rally in airline stocks, with expectations of other companies also reporting strong earnings.

Alaska Air Group acquired Hawaiian Airlines, and its upcoming years look promising as it aims to grow margins to 11%-13% by 2027. The company expects synergies from the acquisition to result in $300 million in additional revenue and $200 million in cost savings. While the current margins are at 3%-4%, achieving the 2027 targets could lead to a significant re-rating of the stock.

Investors should note that reaching pre-pandemic levels will be a challenge due to increased costs, but Alaska Air Group’s plan to increase premium seating mix to 29% could help achieve its goals. Overall, ALK ranks 8th on the list of top airline stocks benefiting from the travel boom, with potential for significant growth if it can execute its strategy successfully.

If you are looking for a promising airline stock trading at less than 5 times its earnings, check out our report on the cheapest AI stock that may offer higher returns in a shorter timeframe.

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Photo credit finance.yahoo.com

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