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Research Alert: CFRA Maintains Hold Opinion On Shares Of Skywest, Inc.

· 02/05/2021 07:58

12:55 PM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our target price to $46 (from $31), 12x our 2022 EPS estimate (raised to $3.71 from $3.05; 2021 lowered to $0.75 from $0.95). Q4 EPS of -$0.93 vs. $1.43 missed consensus by $0.10. Q4 revenue fell 21% Y/Y as SKYW's large partner airlines significantly reduced flight schedules amid the pandemic air travel slump -- SKYW departures were down 26% Y/Y. SKYW's revenue trend was far better than industry average -66% Y/Y, though. This was due to most of SKYW's revenue coming from contracts with major airlines that pay pre-determined fees for regional flights to/from hubs, meaning SKYW often collects a pre-determined fee regardless of how many tickets are purchased for the flight or at what price. Even with a more manageable revenue decline, SKYW generated a large pretax loss of -$62M, and we don't see it consistently generating profits until H2 2021 when vaccines will have been widely distributed, in our view. We remain at Hold, despite an improving demand outlook, due to SKYW's high leverage.