From Nasdaq: 2024-09-15 23:20:45

Alaska Air stock (NYSE: ALK) is trading around $40 per share, 45% below its pre-inflation highs. Most U.S. airline stocks cut their 2024 outlook due to higher costs and pricing issues. ALK lowered its earnings per share guidance in Q2. Can it recover or face underperformance in the current macroeconomic environment?

Alaska Air’s stock performance in 2022 has been turbulent amid rate hikes and global conflicts. Reaching the pre-inflation high of $74 implies an 87% gain, unlikely in the near term. Trefis estimates ALK’s valuation at $48 per share, offering around 20% upside. Analyzing past market crises sheds light on potential future developments.

Alaska Air is seeing revenue growth but a decline in operating margin and reported earnings over recent years. The company faces challenges like fuel cost increases and margin contraction. With total debt of $4 billion and reduced cash levels, Alk is managing its obligations amidst ongoing inflation.

Despite market challenges, Alaska Air has potential for gains once fears of recession are alleviated. However, financial pressures and rising costs pose significant risks. Comparing ALK with peers can provide valuable insights, especially in terms of returns and performance metrics that matter.



Read more at Nasdaq: What’s Happening With Alaska Air Stock?