IB Net Payout Yields Model

Spirit Airlines: Back On The Radar

11/28 Update

Spirit Airlines (SAVE) has surged 20% over the last couple of days after the airline boosted Q4 RASM to ~11% growth. The airline had originally forecast 6% growth after a period of declining metrics.

The airline has amazingly hit new highs following my April article when Spirit Airlines was down in the dumps. Analysts are boosting 2019 EPS estimates above $5 per share. The stock likely rallies towards $70 on this bullish news.

Investors should turn more cautious at these levels. The airline has a tendancy to dramatically boost capacity as yields start to improve. Absent any capacity boost, my view could stay bullish on these gains.

Posted April 27

Spirit Airlines trades back near multi-year lows following a weak Q1 report.
The airline is approaching 30% ASM growth.
Any signs of capacity growth moderating back down toward 15% is bullish for the stock.
Back at the start of 2017, Spirit Airlines (SAVE) dropped off our investment radar due to a cloudy outlook. The discount airline was again focused too much on capacity growth rather than profit metrics while the stock had rallied to yearly highs above $50.
Read the full article on Seeking Alpha. 

Disclosure: No position. Please review the disclaimer page for more details. 


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