Allegiant Travel Company
) is slated to report its second-quarter 2014 results on July 23,
after the market closes. Last quarter, the company delivered a
5.08% positive earnings surprise. Let's see how things are shaping
up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Allegiant Travel is likely to beat
earnings because it has the right combination of two key
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +6.40% for
Allegiant Travel. This is a meaningful and leading indicator of a
likely positive earnings surprise.
Allegiant Travel currently has a Zacks Rank #1 (Strong Buy) which
increases the predictive power of ESP. Note that stocks with Zacks
Rank #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of
The combination of Allegiant Travel's Zacks Rank #1 and +6.40%
ESP makes us confident of an earnings beat this quarter.
Factors at Play
Allegiant Travel is expected to benefit from an improving market
scenario in the forthcoming quarterly results. A sharp drop in the
U.S. unemployment rate and the improving pace of job creation bodes
well for the U.S. economy, which in turn will boost the overall
airline industry. Additionally, the company, which provides low
cost air services to residents of small and underserved U.S.
cities, expects to report PRASM (passenger revenue per available
seat mile) growth of 6.1% to 6.5% in the second quarter.
The carrier expects to deliver earnings growth of 28.14% this
quarter while for the full year, the earnings growth estimate
stands at 25.58%. Further, the carrier has witnessed positive
earnings estimate revisions over the last couple of months, which
explains our bullish stance on the company.
Other Stocks to Consider
Here are some other companies to consider as our model shows
that these have the right combination of elements to post an
earnings beat this quarter:
Southwest Airlines Co
) with earnings ESP of +3.39% and a Zacks Rank #1.
American Airlines Group Inc.
) with earnings ESP of +1.56% and a Zacks Rank #1.
Alaska Air Group Inc.
) with earnings ESP of +0.92% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
ALLEGIANT TRAVL (ALGT): Free Stock Analysis
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis
To read this article on Zacks.com click here.