Alaska Air Group (ALK) Plummets Further Than the Overall Market: Critical Insights Revealed

In the latest trading period, Alaska Air Group (ALK) concluded at $51.62, indicating a decline of -1.64% compared to the previous day’s close. This performance was below the broader market indices; the S&P 500 dropped by 0.56%, the Dow fell by 0.58%, and the technology-focused Nasdaq decreased by 0.51%.

By today, the airline’s stock price had risen by 20.09% over the last four weeks, surpassing the Transportation sector’s increase of 9.07% and the S&P 500’s rise of 7.37% during the same period.

Investors will closely watch the forthcoming earnings announcement from Alaska Air Group. It’s forecasted that the company's earnings per share (EPS) will stand at $1.57, marking a decline of 38.43% since this time last year. Additionally, recent projections suggest revenues could reach $3.66 billion, which would represent an uptick of 26.26% over the corresponding period of the prior year.

For the complete fiscal year, Zacks Consensus Estimates forecast earnings of $3.65 per share and revenues totaling $14.21 billion. This represents decreases and increases of -25.05% and +21.09% compared to the previous year’s figures, respectively.

Additionally, it could prove advantageous for investors to keep an eye on any recent adjustments in analyst forecasts for Alaska Air Group. These recent alterations typically reflect the evolving state of short-term business developments. Consequently, positive revisions in these estimates suggest that analysts have a more optimistic view regarding the company’s operational well-being and earnings potential.

Studies show that these estimate adjustments have a direct relationship with short-term stock price performance. Leveraging this insight, we developed the Zacks Rank, a proprietary framework that incorporates these forecast modifications to provide an effective ranking system.

The Zacks ranking system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has demonstrated significant success over time through external audits showing that #1-ranked stocks have achieved an average yearly gain of around +25% since 1988. In the last thirty days alone, the Zacks consensus earnings per share (EPS) projection for this stock has decreased by 17.22%. At present, Alaska Air Group holds a Zacks rank position at #5 (Strong Sell).

Regarding valuation, Alaska Air Group is currently trading with a Forward P/E ratio of 14.37. In contrast, the average Forward P/E for its industry stands at 9.31, indicating that Alaska Air Group is trading at a higher valuation relative to its peers.

Investors ought to be aware that ALK currently boasts a PEG ratio of 0.53. Similar to the commonly used P/E ratio, this metric factors in the anticipated rate of earnings growth for the company. In contrast, the Transportation - Airline sector held an average PEG ratio of around 0.89 as of yesterday’s close.

The airline segment falls under the broader Transportation sector. At present, this particular industry boasts a Zacks Industry Rank of 134, placing it within the lower quartile among all ranked 250-plus industries.

The Zacks Industry Rank assesses the performance of our distinct industry sectors by calculating the mean Zacks Rank of the component stocks within each group. According to our findings, those sectors ranked in the top 50% tend to surpass their lower-ranked counterparts by a margin of two-to-one.

To keep track of ALK during upcoming trading sessions, make sure to use JWTimurnews.

The article was initially posted on Zacks Investment Research (JWTimurnews).