Alaska Air Group (ALK): Revisiting Valuation After a Volatile Year and Recent 31% Share Price Rebound

Alaska Air Group (ALK) has been on a bit of a rollercoaster lately, with shares sliding over the past year even after a strong month, which sets up an interesting entry point for patient investors.

See our latest analysis for Alaska Air Group.

That recent 30 day share price return of just over 31% has arrived after a much tougher year for Alaska Air Group, with the latest pullback leaving shares at $51.24 and momentum still trying to rebuild against a weaker one year total shareholder return.

If you are comparing Alaska Air to other carriers or adjacent players in the sector, it is a good time to explore aerospace and defense stocks as potential travel and defense demand trends evolve.

With analysts seeing upside to current levels and earnings growth rebounding faster than revenue, investors now face a key question: Is Alaska Air Group trading at a meaningful discount to its fundamentals, or is the market already pricing in that recovery?

Most Popular Narrative Narrative: 21.7% Undervalued

With Alaska Air Group last closing at $51.24 against a narrative fair value near the mid $60s, the stage is set for a potential re rating built on earnings power rather than short term sentiment.

The expansion and optimization of the Seattle international gateway, including new long haul routes and a growing fleet of Boeing 787s, positions Alaska Air Group to benefit from sustained urban growth and increasing travel demand in West Coast cities anticipated to drive higher passenger volumes and top line revenue growth. The successful integration of Hawaiian Airlines and realization of synergy initiatives particularly in network connectivity and premium offerings are unlocking incremental profit, enhancing operational efficiency, and supporting margin expansion throughout the next several years.

Read the complete narrative.

Want to see how this international expansion, premium mix shift, and margin rebuild translate into that upside case? The narrative hinges on ambitious revenue growth, sharply higher profitability, and a leaner share count. Curious how those moving parts combine into a fair value that still sits well above today’s price? The full breakdown connects every assumption to that target.

Result: Fair Value of $65.47 (UNDERVALUED)

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

However, elevated fuel and labor costs, or a bumpy Hawaiian integration, could quickly erode the margin gains this upside scenario depends on.

Find out about the key risks to this Alaska Air Group narrative.

Build Your Own Alaska Air Group Narrative

If you see the story playing out differently, or simply want to dig into the assumptions yourself, you can build a custom view in just a few minutes: Do it your way.

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.

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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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