We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Allegiant (ALGT) Shares Fall In Spite of Rosy September Traffic
Read MoreHide Full Article
Allegiant Travel Company (ALGT - Free Report) reported impressive traffic numbers for September as air-travel demand recovers in the United States from Delta variant-led woes. With more Americans getting vaccinated, the picture is rosier on a year-over-year basis as well as on a year-over-two-year basis. However, the upbeat traffic results failed to impress the market as shares of Allegiant dropped 2.4% since the date of traffic release (Oct 14).
Image Source: Zacks Investment Research
The downside was probably caused by an increase in fuel costs. With oil prices shooting up, Allegiant is witnessing a rise in fuel cost per gallon. The metric is now expected to be at $2.20 per gallon (previous expectation: $2.19 per gallon) for the third quarter (detailed results will be out on Oct 27). Due to higher-than-anticipated irregular operations costs, the company trimmed its third-quarter guidance for adjusted EBITDA margin. Adjusted EBITDA margin for the quarter is estimated to be approximately at 15.5-16.5% (previous guidance: 16-18%). Excluding heightened levels of irregular operations costs, adjusted EBITDA margin would have been nearly 24%.
Coming back to its September traffic report, scheduled traffic (measured in revenue passenger miles) surged 70% from September 2020 levels. Capacity (measured in available seat miles) for scheduled service increased 38.5% from September 2020 readings.
With the traffic surge outweighing capacity expansion, load factor (% of seats filled by passengers) in September expanded 13.1 points to 70.5% from the year-ago period’s levels. For the total system (including scheduled service and fixed fee contract), Allegiant carried more passengers in September 2021, up 71.5% from the September 2020 levels.
Compared with September 2019 levels (pre-COVID), traffic and capacity surged 7.8% and 26%, respectively. However, the load factor tanked 11.9 points to 70.5% as the increase in traffic was less than capacity expansion. For the total system, the airline carried 3.7% more passengers in September 2021 from September 2019 levels.
The carrier expects its September-end quarter’s total revenues to be up approximately 5.3% now (previous expectation: up 3-5%) from third-quarter 2019 levels.
Zacks Rank & Stocks to Consider
Allegiant currently carries a Zacks Rank #3 (Hold).
Long-term (three to five years) expected earnings per share growth rate for Landstar, C.H. Robinson and FedEx is projected at 12%, 9% and 17.9%, respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Allegiant (ALGT) Shares Fall In Spite of Rosy September Traffic
Allegiant Travel Company (ALGT - Free Report) reported impressive traffic numbers for September as air-travel demand recovers in the United States from Delta variant-led woes. With more Americans getting vaccinated, the picture is rosier on a year-over-year basis as well as on a year-over-two-year basis. However, the upbeat traffic results failed to impress the market as shares of Allegiant dropped 2.4% since the date of traffic release (Oct 14).
Image Source: Zacks Investment Research
The downside was probably caused by an increase in fuel costs. With oil prices shooting up, Allegiant is witnessing a rise in fuel cost per gallon. The metric is now expected to be at $2.20 per gallon (previous expectation: $2.19 per gallon) for the third quarter (detailed results will be out on Oct 27). Due to higher-than-anticipated irregular operations costs, the company trimmed its third-quarter guidance for adjusted EBITDA margin. Adjusted EBITDA margin for the quarter is estimated to be approximately at 15.5-16.5% (previous guidance: 16-18%). Excluding heightened levels of irregular operations costs, adjusted EBITDA margin would have been nearly 24%.
Coming back to its September traffic report, scheduled traffic (measured in revenue passenger miles) surged 70% from September 2020 levels. Capacity (measured in available seat miles) for scheduled service increased 38.5% from September 2020 readings.
With the traffic surge outweighing capacity expansion, load factor (% of seats filled by passengers) in September expanded 13.1 points to 70.5% from the year-ago period’s levels. For the total system (including scheduled service and fixed fee contract), Allegiant carried more passengers in September 2021, up 71.5% from the September 2020 levels.
Compared with September 2019 levels (pre-COVID), traffic and capacity surged 7.8% and 26%, respectively. However, the load factor tanked 11.9 points to 70.5% as the increase in traffic was less than capacity expansion. For the total system, the airline carried 3.7% more passengers in September 2021 from September 2019 levels.
The carrier expects its September-end quarter’s total revenues to be up approximately 5.3% now (previous expectation: up 3-5%) from third-quarter 2019 levels.
Zacks Rank & Stocks to Consider
Allegiant currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Landstar System (LSTR - Free Report) , C.H. Robinson (CHRW - Free Report) and Schneider National, Inc. (SNDR - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Long-term (three to five years) expected earnings per share growth rate for Landstar, C.H. Robinson and FedEx is projected at 12%, 9% and 17.9%, respectively.