Spirit Airlines (SAVE) - Get Report jumped more than 7% and earlier Thursday approached a sixth-month high after the company issued an investor update saying that its fourth-quarter results would be ahead of Wall Street expectations.
That prompted analysts at Citigroup and Buckingham Research to lift their price targets on the budget airline.
The company now expects total revenue per available seat mile, or unit revenue, to be down 3.6%, a drop that is narrower than analysts' expectations for a decline of 4.5%. The company also said that it will include an additional $7.2 million in its fourth-quarter revenue results thanks to “out-of-period revenue related to the reclamation of over-remitted federal excise tax.”
Without that reclamation, the company’s TRASM would have been down about 4.3%.
Analysts at Citigroup raised their price target to $48 from $46, while Buckingham Research raised its price target to $53 from $50. Spirit shares were climbing 7.23% to $42.55 Thursday.
Citi’s price target represents a potential 15.4% upside from the stock’s previous closing price, while Buckingham’s price target represents a potential 27% upside from the previous close. Spirit now has an average rating among analysts of hold, with an average price target of $51 ashare, according to Bloomberg research.
In separate news Thursday, Spirit announced that it will be the only airline to have non-stop service from Oakland to Fort Lauderdale starting April 1.
“Offering the only nonstop connection between Oakland with Fort Lauderdale makes it easier for travelers on both ends, and it shows our Guests we’re tailoring our options to them as we keep growing our nationwide network,” said John Kirby, a Spirit Airlines executive.