BMO Raises Price Target#
BMO Capital has increased its price target for Alaska Air Group Inc. from $42.50 to $55.00. This new target suggests a potential 36% increase from the current stock price of $40.45. However, it is still below the highest analyst target of $94. According to analysis, the stock is currently undervalued, with a fair value estimated at $47.46.
Strategic Growth Areas#
The firm pointed out that Alaska Air is making progress on several strategic initiatives. They identified three main areas for potential growth: international expansion, growth in loyalty programs and co-branded credit cards, and modernization of revenue management systems. BMO also adjusted its fiscal estimates, lowering projections for 2026 while increasing those for 2027, thanks to expected higher revenue and lower fuel costs.
Recent Financial Performance#
In the first quarter of 2026, Alaska Air reported a net loss, largely due to high fuel costs and operational issues. The adjusted loss per share was $1.68, slightly worse than the expected $1.65. Despite this, the airline's total revenue for the quarter was $3.3 billion, which met forecasts. The company has withdrawn its full-year guidance due to challenges in managing costs amid fluctuating fuel prices, even as travel demand remains strong.
Analyst Reactions#
Other analysts have also adjusted their price targets for Alaska Air. Raymond James raised its target to $60 from $50, while Evercore ISI lowered its target to $55 from $60. Both firms maintain an Outperform rating, although they have reduced earnings estimates for 2026 and 2027. The airline's unit revenue increased by 3.5%, but total unit costs rose by 7%, highlighting ongoing challenges in cost management and profitability.