Analysts Raise Alaska Air Group Price Target 2.3% to $71.57 Before Q4 Report
Analysts raised Alaska Air Group’s consensus price target 2.3% to $71.57 this quarter on expectations of a 3% revenue increase, despite lowered EPS forecasts. The airline’s January 22 Q4 earnings release faces mixed outlooks, with Cowen’s Helane Becker providing a bullish $85 target.
1. Q4 Earnings Performance
Alaska Air Group reported GAAP net income of $21 million for the quarter ended December 31, 2025, translating to $0.18 per share, down from $71 million and $0.55 per share in the year-ago period. On an adjusted basis, which excludes special items and hedge adjustments, the airline delivered $50 million in net income, or $0.43 per share, comfortably ahead of the consensus estimate of $0.11 per share. Revenue for the quarter reached $3.6 billion, driving a 0.6% year-over-year increase in unit revenue despite a temporary demand pullback related to the November government shutdown.
2. Operational and Integration Milestones
During Q4, Alaska Air achieved the single operating certificate milestone that fully combines Hawaiian Airlines and Alaska Airlines under one FAA-recognized carrier, representing a cornerstone of its Alaska Accelerate integration strategy. The airline also took delivery of six new 737-8 and one 787-9 aircraft, began marketing nonstop routes from Seattle to London and Rome for spring 2026 launch, and rolled out multi-currency sales support with Japanese, Korean, and Italian-language websites to bolster international bookings.
3. Cost Control and Revenue Diversity
Unit costs excluding fuel, freighter expenses, and special items rose by just 1.3% year-over-year, outperforming prior guidance and underscoring management’s disciplined cost-control efforts. Fuel expense averaged $2.57 per gallon, reflecting elevated West Coast refining prices. On the revenue side, corporate travel bookings climbed 9%, premium ancillary fees grew 7%, cargo revenue surged 22%, and loyalty program income expanded by 12%, highlighting the resilience of diversified revenue streams.
4. 2026 Outlook and Capital Deployment
Early Q1 bookings are tracking higher, including a 20% year-over-year increase in managed corporate revenues. Alaska Air expects first-quarter unit revenues to be positive and adjusted per-share earnings roughly flat versus last year, marking another step toward profitability expansion. For full-year 2026, management projects system capacity growth of 2% to 3%, adjusted earnings per share in a range that reflects ongoing macroeconomic uncertainty, and capital expenditures of approximately $1.4 billion to $1.5 billion. In Q4, the airline repurchased 0.7 million shares for $30 million, bringing total share buybacks in 2025 to 11.3 million shares for $570 million.