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Is Allegiant Travel (ALGT) Poised to Beat Earnings in Q3?

Allegiant Travel CompanyALGT is scheduled to report third-quarter 2015 financial numbers after the market closes on Oct 21.

In the last quarter, the company posted a 1.6% earnings surprise. Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Allegiant Travel is likely to beat earnings this season because it has the right combination of two key ingredients.

Zacks ESP:Earnings ESP for the company is pegged at +0.76% as the Most Accurate estimate stands at $2.65 while the Zacks Consensus Estimate is lower at $2.63. This serves as a meaningful and leading indicator of a likely positive earnings surprise.

Zacks Rank: Allegiant Travel currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

The combination of Allegiant Travel's Zacks Rank #2 and +0.76% ESP makes us reasonably confident of an earnings beat.

What is Driving the Better-Than-Expected Earnings?

Allegiant Travel reported strong air traffic growth in the third quarter of 2015 as compared to the year-earlier quarter. Further, both passenger count and revenue passenger miles improved 23% and 20%, respectively.

Allegiant Travel continues to gain from huge travel demand. Moreover, low ticket prices coupled with the company's fleet expansion plans are likely to boost the top and the bottom line of the company significantly. In addition, declining fuel prices and continuous route expansion are expected to contribute to the carrier's profits.

Other Stocks to Consider

Here are other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

American Airlines Group Inc. AAL with an earnings ESP of +1.48% and a Zacks Rank #2.

Alaska Air Group, Inc. ALK with an earnings ESP of +0.48% and a Zacks Rank #2

Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% and a Zacks Rank #2.

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HAWAIIAN HLDGS (HA): Free Stock Analysis Report

ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report

AMER AIRLINES (AAL): Free Stock Analysis Report

ALASKA AIR GRP (ALK): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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