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Barclays On Spirit Airlines: 'Tough Guide, But Still Believers'

Courtesy of Benzinga.

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In a report published Thursday, Barclays analysts maintained an Overweight rating on Spirit Airlines Incorporated (NYSE: SAVE), while reducing the price target from $110 to $105.

Spirit Airlines’ industry leading profitability levels are largely driven by the company’s novel approach towards revenue and low costs. The analysts believe that the “SAVE thesis of high growth, high returns at a reasonable multiple remains very much intact.”

Spirit Airlines guided to lower-than-expected 2Q operating margin besides trimming its FY15 margin guidance. “The margin guide was narrowed to 24-27% from 24-29%, reducing the mid-point of margin guide ~100bps (fuel accounting for ~50bps at +4-5c),” the report stated.

“We reconcile our reduced TRASM outlook to the bigger drag of new markets. The ~3.5pts of ‘fare compression’ is looking less SAVE-specific,” the analysts pointed out.

The EPS estimates for 2015 and 2016 have been reduced from $5.45 to $4.95 and from $5.75 to $5.0, respectively.

Latest Ratings for SAVE

Date Firm Action From To
Apr 2015 Evercore Partners Upgrades Hold Buy
Mar 2015 Stifel Nicolaus Downgrades Buy Hold
Feb 2015 Citigroup Maintains Buy

View More Analyst Ratings for SAVE
View the Latest Analyst Ratings

Posted-In: BarclaysAnalyst Color Price Target Reiteration Analyst Ratings

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