Why Is Spirit Airlines Stock Falling in 2017?



2016 performance

Spirit Airlines (SAVE) is expected to announce its 4Q16 financial results on February 7, 2017. In 2016, SAVE rose the most at 33.5%, followed by United Continental Holdings (UAL) at 21.9% and Southwest Airlines (LUV) at 13.5%. Alaska Air stock rose ~10.0%, and American Airlines (AAL) rose ~6.6%.

In 2016, Delta Air Lines (DAL) fell ~5.9%, followed by Allegiant Travel (ALGT) that fell 4.0% and JetBlue (JBLU) that fell 3.9%.

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The broader market, tracked by the SPDR S&P 500 ETF (SPY), rose about 8.7% in 2016. Airline services are discretionary spending and compete for consumers’ money. So it makes more sense to compare an airline’s performance with the consumer discretionary sector. The Consumer Discretionary Select Sector SPDR ETF (XLY) rose 3.7% in the same period.

Spirit Airlines’ YTD performance

The start of the new year hasn’t been positive for Spirit Airlines. The stock has already fallen 6.6% YTD (year-to-date) as of January 31, 2017. Investors are concerned about Spirit Airlines’ unit revenue performance.

Some of the negative sentiment is also due to JetBlue providing weak guidance for the first quarter of 2017. Some of the factors affecting JetBlue will also impact Spirit Airlines.

Series overview

In this series, we’ll look at analysts’ estimates for 3Q16. We’ll also see what factors will lead to Spirit’s expected performance. Finally, we’ll take a look at some key indicators you should look out for.


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