On Tuesday, TD Cowen demonstrated a cautiously optimistic stance on Hawaiian Holdings (NASDAQ:HA) by adjusting the company's price target to $13.00, up from the previous $12.00. The firm maintained a Hold rating on the airline's stock. The revision comes ahead of the company's second-quarter 2024 earnings report, which is scheduled to be released after the market closes on July 23, with a conference call to follow that evening.
The analyst from TD Cowen updated their estimates for Hawaiian Holdings for the second quarter and the second half of 2024. They anticipate that the airline's available seat miles (ASMs) will reach the lower end of the company's guidance range. Concurrently, they expect revenue per available seat mile (RASM) and cost per available seat mile excluding fuel (CASMex) to trend towards the higher end of the guidance range.
The management's decision not to revise guidance in their recent debt exchange 8-K filing was perceived positively by the analyst. This suggests that the company's management is confident in their current projections and operational trajectory.
While TD Cowen is more constructive on Hawaiian Holdings' operational metrics, they have concurrently adjusted their estimates downwards for the company's earnings, citing increased interest expenses as the reason. This reflects a more conservative outlook on the financial aspects of the airline's performance, balancing the positive operational expectations with financial caution.
In other recent news, the U.S. Treasury Department has raised $556.7 million from the sale of warrants in 11 major U.S. airlines, initially issued as part of the government's COVID-19 relief efforts for the industry. This figure represents a small portion of the total pandemic aid provided to these airlines, with American Airlines (NASDAQ:AAL), Delta, United Airlines, and Southwest Airlines (NYSE:LUV) among the top recipients. In the same vein, the U.S. Treasury Department aims to gather a minimum of $492 million from upcoming auctions where it will sell warrants to buy shares in various U.S. airlines.
In a separate development, major U.S. airlines, including American Airlines, Delta Air Lines (NYSE:DAL), United Airlines, and others, have initiated legal action against the U.S. Department of Transportation over a regulation that mandates the upfront display of various airline fees.
Susquehanna has recently adjusted its outlook on Hawaiian Holdings, citing a slow rebound in travel demand from Japan and Maui. The firm maintains a Neutral rating on the company's stock but has lowered the price target from $15.00 to $14.00. Hawaiian Holdings also reported an adjusted EBITDA loss of $116 million in its first quarter 2024 financial results, despite strong demand for travel to Hawaii from North America. The company remains optimistic about returning to profitability, highlighting its work for Amazon (NASDAQ:AMZN), the launch of Starlink, and the addition of two Boeing (NYSE:BA) 787s to its fleet. These recent developments reflect the dynamic nature of the airline industry.
InvestingPro Insights
In light of TD Cowen's updated price target and hold rating for Hawaiian Holdings (NASDAQ:HA), recent data from InvestingPro underscores the financial challenges the airline faces. With a market capitalization of $704.63M and a negative P/E ratio of -2.34, reflecting investor concerns about profitability, Hawaiian Holdings also shows a revenue decline of -0.99% over the last twelve months as of Q1 2024. This contraction is juxtaposed with a modest quarterly revenue growth of 5.38% in Q1 2024, indicating some potential for recovery.
InvestingPro Tips suggest the company is navigating a significant debt burden and may have difficulty meeting interest payments, which aligns with TD Cowen's concerns regarding increased interest expenses. Additionally, Hawaiian Holdings' short-term obligations surpassing its liquid assets could signal liquidity challenges ahead. With the next earnings date set for July 23, 2024, these financial metrics and considerations will be crucial for investors evaluating the company's near-term prospects.
For those seeking a more in-depth analysis, InvestingPro offers additional tips on Hawaiian Holdings' financial health and investment potential. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for access to these valuable insights. Currently, there are 9 more InvestingPro Tips available that can provide further guidance on Hawaiian Holdings' financial outlook.
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