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How Analysts View Hawaiian Airlines ahead of Its Q1 Results

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Analysts’ recommendations

Analysts do not seem very optimistic about Hawaiian Airlines (HA) in the near term, as it has received a consensus rating of ~2.85 and a consensus “hold” recommendation from analysts polled by Reuters.

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Only 31% of the 13 analysts covering the stock have a bullish recommendation on the stock. About 38% of the analysts have suggested holding it, while the remaining 31% recommend selling the stock. Wall Street analysts’ consensus target price of $31.09 shows an increase of 3.9% in the next 12 months.

Hawaiian Airlines has struggled in recent years due to weakness in inter-island travel demand and rising competition in the Hawaii travel market. Even analysts have downgraded their ratings on the stock on fears of a rising competitive threat from Southwest Airlines (LUV), which on March 4, announced launching its services to Hawaii.

Among the major research firms, Deutsche Bank downgraded its rating on Hawaiian Airlines, while Buckingham Research lowered its target price. Deutsche Bank analyst Michael Linenberg believes Hawaiian Airlines will be hurt the most by Southwest’s inter-island business, as it’s the most profitable route for the company.

Linenberg downgraded his rating for Hawaiian Airlines to “sell” from “hold” and cut its target price on the stock to $27 from $33. Buckingham Research also lowered its one-year target price for Hawaiian Airlines to $28 from $33.

Peers’ rating

Analysts have a contrasting view on the majority of Hawaiian Airlines’ peers, as they have provided bullish recommendations to most of the airline stocks (IYT). Analysts have “buy” ratings on major US air carriers including Spirit Airlines (SAVE), American Airlines (AAL), and Delta Air Lines (DAL). Wall Street’s one-year target prices for Spirit, American, and Delta suggest returns of 31.3%, 28.2%, and 15.5%, respectively.

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