Earnings Previews: Lam Research, Kinder Morgan, Chipotle, Alaska Airlines, American Airlines

Alaska Airlines

Alaska Air Group Inc. (NYSE: ALK) is scheduled to report results before markets open Thursday morning. After United Airlines reported a worse-than-expected loss on Monday evening and a miss on revenue, Alaska stock is trading down nearly 4%, nearly as much as United itself. Since January of 2020, the airline’s shares have gained just 1.5%, but shares traded up about 120% over the past 12 months, thanks in part to federal help and, now, rising passenger counts and expectations for more.

Most analysts–11 of 14–rate the stock a Buy or Strong Buy while the other three think it best to Hold. The 12-month price target on the stock is $82, implying potential upside of about 23.5% to a recent price of $66.33. At the high target of $90, the potential upside is around 36%.

Alaska is expected to post a loss per share of $3.63 on revenue of $785.58 million for the first quarter. For the year, analysts are forecasting a loss per share of $3.25 on revenue of $5.69 billion. Current expectations call for Alaska to post a profit in the second half of this year.

Shares trade at around 11.2x estimated 2022 earnings and 7.6x estimated 2023 earnings. The stock’s 52-week range is $23.39 to $74.25. Alaska suspended its dividend last year.

American Airlines

The impact of United Airlines’ report has hit American Airlines Group Inc. (NASDAQ: AAL) even harder than it hit United. The stock traded down more than 6% Tuesday morning ahead of American’s Thursday morning earnings report. The airline has already tipped a decline of 62% in first-quarter revenue and a net loss of $2.7 billion. Since January of last year, the stock is down more than 25% and that includes a 12-month gain of some 74%.

Half of the 18 analysts who cover the stock rate it a Buy or Strong Buy and seven rate the shares a Hold. The 12-month price target is $17.75 and shares were trading at around $20.25 early Tuesday, outpacing analysts’ expectations. At a high target of $28, the stock’s upside potential is around 28%.

Analysts are forecasting a net loss per share of $4.24 on revenue of $4.04 billion. Unlike Alaska, losses are expected to continue throughout the year, leading to a full-year per-share loss of $8.29 on revenue of $26.29 billion.

American’s stock trades at 34x estimated 2022 EPS and 13x estimated 2023 earnings. The stock’s 52-week range is $8.25 to $26.09. American has suspended its dividend.

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