SkyWest (SKYW): Assessing Valuation Following Fresh Analyst Upgrades and Strong Buy Ratings

If you have been following SkyWest (SKYW), you might have noticed a new wave of optimism swirling around the stock. Several analysts recently raised their earnings estimates for the year ahead and re-affirmed strong buy ratings, painting a picture of rising confidence in SkyWest’s outlook. These moves, along with high marks in value, growth, and momentum, are fueling questions for investors about what comes next for SkyWest’s share price.

Looking back, the past year has been quite impressive for SKYW holders: the stock is up 57%, including a 16% gain over the past three months. That momentum appears to be building, especially in the wake of positive analyst sentiment and recent estimate revisions. While other transportation names have delivered steady returns, SkyWest’s performance stands out when comparing both short- and longer-term trends.

Given this strong run and the market’s enthusiastic response to fresh analyst optimism, should investors read this as a sign that SkyWest is still undervalued, or is the market already pricing in all the future growth?

Most Popular Narrative: 9.5% Undervalued

The most widely followed narrative suggests that SkyWest is undervalued by about 9.5% versus its fair value estimate, driven by robust earnings growth and improvements in the company's fleet and operating model.

Fleet modernization through significant orders of new, fuel-efficient E175 aircraft under long-term, flexible contracts is expected to improve cost structure, enhance asset utilization, and boost net margins as newer planes replace older, less efficient models and support new multiyear agreements with major carriers.

Why are analysts so confident SkyWest deserves a higher price? The foundation of this valuation is hiding in plain sight: fresh fleet investments, bold margin forecasts, and a future profit multiple that rivals some market leaders. Hungry for the behind-the-scenes projections that justify that premium price target? The narrative’s numbers are bigger, bolder, and could surprise even seasoned investors.

Result: Fair Value of $131.8 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing pilot shortages and heavy reliance on major airline contracts remain key risks that could upend the current thesis for SkyWest.

Find out about the key risks to this SkyWest narrative.

Another View: Are Market Signals Sending a Different Message?

Looking from another angle, a comparison to the global airline industry using a common valuation gauge paints SkyWest as pricier than its wider sector. Does this challenge the fair value case, or does it reflect unique strengths?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding SkyWest to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own SkyWest Narrative

If you see the numbers differently or want to dive deeper on your own terms, creating your own narrative takes just a few minutes. Why not explore the data and Do it your way

A great starting point for your SkyWest research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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