The firm said it upped its rating on the airliner as it believes Alaska Air is in a good position and able to continue buying back stock.
Credit Suisse set a $78 price target on Alaska Air stock.
"We are less worried about ALK's issues in SEA with the rate of competitive capacity adds declining, and more worried about industry-wide fare compression," Credit Suisse said in a note.
"We expect ALK to buy back up to 8% of its market cap in 2015, second only to Delta Air Lines (DAL), and we see the least downside to ALK consensus," the firm added.
Shares of Alaska Air are higher by 2.31% to $63.46 at the start of trading on Thursday.
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 revenue growth, solid stock price performance, impressive record of earnings per share growth, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ALK's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 3.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 65.92% and other important driving factors, this stock has surged by 27.67% 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 $4.43 versus $3.59 in the prior year. This year, the market expects an improvement in earnings ($5.91 versus $4.43).
- 35.46% is the gross profit margin for ALASKA AIR GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.74% is above that of the industry average.
- Net operating cash flow has significantly increased by 112.39% to $514.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 74.79%.
- You can view the full analysis from the report here: ALK Ratings Report