On Tuesday, TD Cowen reaffirmed a positive stance on SkyWest (NASDAQ:SKYW) shares, raising the airline's price target to $120 from the previous $95 while maintaining a Buy rating. The upgrade follows SkyWest's recent financial performance, which surpassed expectations.
SkyWest reported earnings per share (EPS) of $2.16 last week, outperforming the estimated figures of $1.95 by TD Cowen and $1.93 consensus. The company's sales reached approximately $913 million, exceeding both TD Cowen's and consensus estimates of $907 million and $896 million, respectively.
Management at SkyWest has provided an optimistic outlook, revising upward the full-year 2024 EPS guidance. They also anticipate the full-year 2025 EPS to surpass previous consensus estimates. This positive revision is attributed to increasing utilization rates as the company successfully addresses pilot staffing challenges.
The analyst from TD Cowen highlighted SkyWest's strategic positioning to capitalize on the growing demand for regional airline services. The company's improved operational performance and favorable market conditions have led to the recommendation to reiterate a Buy rating and raise the price target to $120.
In other recent news, SkyWest Incorporated has reported strong third-quarter results, with a net income of $90 million and a total revenue of $913 million, a 19% increase from the same period last year. The airline's growth strategy includes expanding its fleet with 60 new aircraft by the end of 2026. The company also plans to repay over $400 million in debt in 2024 and forecasts capital expenditures of $320-$350 million.
Despite projected increases in maintenance expenses by $40 million in the second half of 2024, SkyWest remains committed to growth in underserved markets and increasing aircraft utilization. The company has seen strong demand, driving plans to reintroduce service to cities previously withdrawn and significant growth in winter bookings for their charter operation.
SkyWest is nearing pre-pandemic staffing levels, with nearly 5,000 pilots and plans to expand its workforce by mid-2025. However, the company is not considering reinstating dividends at this time. These recent developments underline SkyWest's commitment to enhancing its service offerings and growing its pilot workforce, demonstrating confidence in its long-term growth prospects.
InvestingPro Insights
SkyWest's recent financial performance and positive outlook are reflected in the latest InvestingPro data and tips. The company's market cap stands at $4.12 billion, with a P/E ratio of 16.67, indicating a reasonable valuation relative to its earnings. InvestingPro data shows strong revenue growth, with a 16.42% increase in the last twelve months and a 19.14% increase in the most recent quarter, aligning with the company's better-than-expected sales figures mentioned in the article.
Two key InvestingPro Tips support the bullish sentiment expressed by TD Cowen. Firstly, SkyWest's net income is expected to grow this year, which corroborates management's upward revision of the full-year 2024 EPS guidance. Secondly, the stock is trading near its 52-week high, with a remarkable 122.96% price return over the past year, suggesting strong investor confidence in the company's prospects.
These insights are just a sample of the valuable information available on InvestingPro. Subscribers can access 11 additional tips for SkyWest, providing a more comprehensive analysis of the company's financial health and market position.
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