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Alaska Air Group (ALK) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Alaska Air Group (ALK) closed at $41.54 in the latest trading session, marking a +0.9% move from the prior day. This move outpaced the S&P 500's daily gain of 0.16%. At the same time, the Dow lost 0.42%, and the tech-heavy Nasdaq gained 0.17%.

Coming into today, shares of the airline had lost 15.72% in the past month. In that same time, the Transportation sector lost 8.1%, while the S&P 500 lost 6.79%.

Investors will be hoping for strength from Alaska Air Group as it approaches its next earnings release. On that day, Alaska Air Group is projected to report earnings of $1.86 per share, which would represent year-over-year growth of 720%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.56 billion, up 67.88% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.84 per share and revenue of $9.46 billion. These totals would mark changes of +289.16% and +53.15%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for Alaska Air Group. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.9% lower within the past month. Alaska Air Group is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Alaska Air Group has a Forward P/E ratio of 10.72 right now. Its industry sports an average Forward P/E of 17.36, so we one might conclude that Alaska Air Group is trading at a discount comparatively.

The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 220, putting it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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