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Alaska Air Group's 1Q17 Preview: Why Analysts Are Optimistic

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Alaska Air Group's 1Q17 Preview: Why Analysts Are Optimistic PART 1 OF 7

Alaska Air Stock Falls as Industry Woes Continue

Stock movement

2017 started on a good note for Alaska Air Group (ALK), which rose almost 5.7% in January. This good fortune continued into February, with the stock gaining 4.3% in the month.

However, in March, falling unit revenue guidance and rising capacity led to the stock’s falling nearly 5.7%.

Alaska Air Stock Falls as Industry Woes Continue

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Year-to-date (or YTD), Alaska Air stock has fallen ~2.7%. With the exception of Southwest Airlines (LUV), which has risen 9% YTD, all of ALK’s airline peers have lost value. 

Delta Air Lines (DAL) has seen the highest fall of 10.5%, followed by Allegiant Travel (ALGT) with a fall of 8.6% and JetBlue Airways (JBLU) with a fall of 7.5%. American Airlines (AAL), too, has fallen ~7.2%, and United Continental (UAL) has fallen 5.2% YTD.

The broader market tracked by the S&P 500 Index (SPY) has risen ~4.0% YTD as of April 14, 2017. As airline services are discretionary in nature and compete for consumers’ money, it makes more sense to compare airlines’ performances with that of the consumer discretionary sector.  

The Consumer Discretionary Select Sector SPDR ETF (XLY) has risen 6.3% YTD as of April 14. The Dow Jones US Airline Index (DJUSAR) has fallen 3.4% during the same period.

Series overview

Alaska Air is expected to announce its 1Q17 financial results on April 26, 2017. In this series, we’ll look at what investors can expect for the company’s 1Q17 and, more importantly, for the year. We’ll also discuss key indicators that investors should watch.

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