Alaska Air (ALK) Is Up 6.7% After Cutting Q4 EPS Outlook On IT Outage And Fuel Costs

• Alaska Air Group recently cut its Q4 2025 adjusted EPS outlook to about $0.10 from at least $0.40, blaming an internal IT outage, an October government shutdown that forced roughly 600 flight cancellations, and higher fuel costs for the weaker guidance.
• In response, the company has brought in a third-party consultant to overhaul its IT infrastructure and bolster data center resilience, a move that could meaningfully influence its future operational reliability and cost profile.
• We’ll now examine how the IT outage-driven downgrade to Alaska Air Group’s Q4 outlook reshapes its longer-term investment narrative.

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Alaska Air Group Investment Narrative Recap

To invest in Alaska Air Group today, you need to believe the airline can offset higher costs with improved operations, integration benefits from Hawaiian, and a stronger premium and loyalty offering. The Q4 earnings downgrade highlights how operational hiccups and fuel volatility can disrupt that path, but the core near term catalyst remains execution on integration and cost control, while the biggest current risk is rising unit costs that pressure already thin margins.

Among recent developments, the company’s decision to bring in a third party consultant to overhaul its IT and data center resilience directly connects to this Q4 setback. For investors watching near term catalysts, this effort sits alongside ongoing network expansion and digital investments as a key test of whether Alaska can convert operational reliability into better earnings quality over time.

Yet investors should also be aware that rising non fuel unit costs and integration spending could still...

Read the full narrative on Alaska Air Group (it's free!)

Alaska Air Group's narrative projects $16.9 billion revenue and $1.2 billion earnings by 2028. This requires 7.8% yearly revenue growth and roughly a $0.9 billion earnings increase from $313.0 million today.

Uncover how Alaska Air Group's forecasts yield a $65.71 fair value, a 45% upside to its current price.

Exploring Other Perspectives

Six members of the Simply Wall St Community currently see Alaska Air Group’s fair value between US$49 and US$68.78, a wide span of views. Against this, the recent IT outage and cost pressure remind you how fragile airline margins can be and why it helps to weigh several different opinions before deciding what the stock is worth.

Explore 6 other fair value estimates on Alaska Air Group - why the stock might be worth as much as 52% more than the current price!

Build Your Own Alaska Air Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Alaska Air Group research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Alaska Air Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alaska Air Group's overall financial health at a glance.

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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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