Hawaiian Holdings, Inc.’s HA performance with respect to passenger revenues is encouraging. Notably, the company has raised guidance for first-quarter 2018 operating revenue per available seat mile (RASM) owing to better-than-expected passenger revenue performance in each of its geographies as well as higher cargo demand across the network. It now expects RASM to increase 3-5%, up from its previous prediction of a decline of 0.5% to a rise of 2.5%.
In 2017, passenger revenues increased 10.1% on a year-over-year basis, accounting for 87.6% of the company’s top line. The company’s growth is supported by strong demand for air travel to Hawaii. The exit of Island Air has further strengthened the airline’s foothold in the region.
The company’s decision announced in October 2017, to reward shareholders with dividend payments is also impressive. Later in December, the company announced a new share repurchase program worth $100 million through Dec 31, 2019, an addition to the existing $100 million authorization. Such investor-friendly initiatives bode well for the stock.
The airline’s efforts to modernize its fleet also raise optimism. To this end, it is on track to remodel its A330 fleet by adding lie flat premium seats.
Hawaiian Holdings, Inc. Price and Consensus
Hawaiian Holdings, Inc. Price and Consensus | Hawaiian Holdings, Inc. Quote
The positive sentiment revolving around the stock is evident from the Zacks Consensus Estimate for current-quarter earnings being revised 39.6% upward in the last 60 days. While the same for the full year has moved 16.8% north.
Additionally, the company has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
In light of the above positives, we believe investors should hold on to Hawaiian Holdings stock for now.
Zacks Rank & Key Picks
Hawaiian Holdings carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are American Airlines Group Inc. AAL, International Consolidated Airlines Group SA ICAGY and AZUL SA AZUL. While International Consolidated Airlines sports a Zacks Rank #1 (Strong Buy), American Airlines and AZUL carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of American Airlines, International Consolidated Airlines and AZUL have rallied more than 22%, 24% and 53%, respectively, in a year.
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