Barclays Sees More Upside Potential in Spirit Airlines Stock



Barclays upgrades rating

Barclays, a major investment research firm, sees more upside potential in Spirit Airlines (SAVE) stock. On March 11, Barclays analyst Brandon Oglenski stated that Spirit Airlines would continue to outperform its peers this year in terms of revenue and margin growth.

Oglenski believes that the company’s strong management, revenue-driving initiatives, and new market growth will help it deliver strong bottom-line results for investors in the upcoming quarters. Citing the robust US travel demand environment and Spirit’s sustained focus on improving network and revenues, the analyst said the stock is significantly undervalued.

Given the above mentioned fundamental growth factors, Oglenski projects over 40% EPS growth for Spirit Airlines in 2019. The consensus 2019 EPS estimate polled by Reuters is currently pegged at $6.55, which signifies YoY growth of ~49%. In the last fiscal year, the company’s EPS grew 32%.

Oglenski upgraded his rating on the ultra-low-cost carrier to “overweight” from “equal weight” and raised the target price by $5 to $70. The analyst’s new target price depicts an upside potential of 32.6% from yesterday’s closing price of $52.81.

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Consensus recommendation

Analysts’ ratings make Spirit Airlines an intriguing choice for investors. Wall Street expects a massive upside in the company’s stock price. About 83% of analysts have provided bullish recommendations on the airline.

As of March 13, out of 18 analysts, 15 have given Spirit Airlines “strong buy” or “buy” recommendations, while the remaining three have given it “hold” recommendations. Given Wall Street’s one-year forward price target of $76.38, the stock has an upside of 44.6% from its current market price of $52.81.

According to analysts’ recommendations and target price, Spirit Airlines stock has the potential to give higher returns to investors than peers in the airline industry (IYT). The target prices of Delta Air Lines (DAL), Southwest Airlines (LUV), and United Airlines (UAL) imply a one-year return of 21.9%, 24.4%, and 30.2%, respectively.


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