NEW YORK (TheStreet) -- Shares of Alaska Air Group Inc. (ALK - Get Report) are lower by -1.34% to $45.56 in pre-market trade this morning after it was downgraded to "neutral" from "overweight" at JPMorgan Chase (JPM).
The firm cut its price target to $53.50 from $56.50, citing competition with Delta Airlines (DAL) and more compelling risk/reward ratios within the industry.
Separately, TheStreet Ratings team rates ALASKA AIR GROUP INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALASKA AIR GROUP INC (ALK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 61.90% and other important driving factors, this stock has surged by 47.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ALK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ALASKA AIR GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALASKA AIR GROUP INC increased its bottom line by earning $3.59 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $3.59).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Airlines industry average. The net income increased by 58.6% when compared to the same quarter one year prior, rising from $104.00 million to $165.00 million.
- ALK's revenue growth trails the industry average of 39.3%. Since the same quarter one year prior, revenues slightly increased by 9.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels.
- You can view the full analysis from the report here: ALK Ratings Report