SkyWest (SKYW – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Helane Becker from TD Cowen remains neutral on the stock and has a $50.00 price target.
Helane Becker has given her Hold rating due to a combination of factors that have influenced SkyWest’s performance. SkyWest has consistently surpassed expectations throughout the year, notably in the third quarter of 2023. The company reported an adjusted net income of $23 million on revenue amounting to $766 million. Furthermore, SkyWest announced a significant order for 19 new E175s, totaling a value of $1.1 billion, to replace older models in the United CPA, with delivery anticipated between the latter half of 2024 and 2026. The firm also executed a repurchase of 19% of the outstanding shares this year.
Despite the impressive performance and strategic steps, Becker maintains a Market Perform rating for SkyWest shares. She projects that the shares can sell at approximately $50 per share, which is equivalent to around 5.8 times the estimated EV/EBITDAR for 2024. SkyWest’s third quarter results exceeded both Becker’s and the consensus estimate, with block hours almost 1% above the estimated figure. However, the shortage of captains, resulting in a 10.2% year-over-year decrease in block hours, is limiting growth opportunities. Management remains optimistic, as they have identified signs of improvement.
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SkyWest (SKYW) Company Description:
Sky West, Inc. is a holding company, which engages in the provision of scheduled passenger services in the United States of America, Canada, Mexico and the Caribbean. It operates through the following three segments: SkyWest Airlines and SkyWest Leasing. The SkyWest Airlines segment provides as well as Mexico and Canada. The SkyWest Leasing segment includes revenue attributed from ownership cost earned under the applicable cost and fixed-fee flying contracts. The company was founded in 1972 and is headquartered in St. George, UT.
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