SkyWest Stock Can Fly Significantly Higher

Nov. 20, 2023 10:13 AM ETSkyWest, Inc. (SKYW) StockERJ, UAL, SKYW3 Comments

Summary

  • SkyWest reported solid Q3 2023 financial results, despite a decrease in operating income due to higher pilot pay and staff compensations.
  • The growth opportunities for SkyWest include the pass-through nature of fuel costs and capacity agreements with minimum guarantees, which shield the company from price fluctuations and weakening ticket prices.
  • SkyWest is repurchasing stock and expects to execute the same number of block hours in 2024, with the shortage of pilots being the limiting factor. There is significant upside potential for the stock based on improved EBITDA estimates and free cash flow projections.
  • Looking for a helping hand in the market? Members of The Aerospace Forum get exclusive ideas and guidance to navigate any climate. Learn More »

Embraer E175 United Airlines landing in LAX - Tom Bradley International Airport

Embraer E175 United Airlines landing in LAX - Tom Bradley International Airport

LeoPatrizi/iStock Unreleased via Getty Images

In August, I marked SkyWest (NASDAQ:SKYW) stock a hold but did point out the strong balance sheet with significant cash

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This article was written by

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Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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