ALGT Stock Today: Raymond James Downgrades on Valuation — December 27
ALGT stock is in focus after Raymond James issued a downgrade on stretched valuation following a 52% six-month rally. Allegiant Travel (ALGT) has improved fourth-quarter capacity and margin guidance, and liquidity looks solid, but the call questions how much is already priced in. The recent share price sits near $84.64, within a 52-week range of $39.80 to $107.57. For US investors, we break down the downgrade, valuation checks, key technicals, and what to watch next.
Raymond James Downgrade: What Changed?
Raymond James cited stretched valuation after ALGT stock rallied sharply, which can cap upside in the near term. The firm’s move follows strong recent performance and better operations, but it argues the shares have moved ahead of fundamentals. Details of the downgrade were reported by Investing.com source.
A downgrade after a big run often leads to consolidation as buyers reassess. Consensus now shows 1 Strong Buy, 3 Buy, and 7 Hold, with a median target of $85 and consensus at $79. That places the recent $84.64 close near target. We see potential for range trading as investors weigh guidance strength against valuation reset.
Rally Scorecard and Valuation
ALGT stock gained about 52% over six months, supported by better demand trends and cost actions. The move has brought shares close to the median target and back above the 50-day and 200-day averages. Yahoo Finance summarized the run and investor debates on what comes next source.
At ~$84.64, price to sales is roughly 0.60, price to operating cash flow is about 3.95, and price to free cash flow is near 15. Negative earnings make P/E less useful. Enterprise value to EBITDA screens high due to depressed EBITDA. Price to book looks inflated because equity is very small, which can distort that ratio.
Guidance and Balance Sheet Signals
Management’s outlook calls for stronger fourth-quarter capacity and margins, a positive sign for a leisure-focused carrier. That support helps, but the downgrade suggests momentum may cool if unit revenue or costs wobble. We think investors should track fuel trends, ticket pricing, and load factors to confirm that the outlook can sustain recent performance.
Cash generation trends matter with airlines. ALGT stock shows operating cash flow per share near 21.35 and free cash flow per share around 5.64 on a trailing basis. Debt to equity sits near 2.03, which warrants monitoring. A steady cash position helps through demand swings, but leverage and rate sensitivity keep risk on the table.
Technical Setup and Key Levels
Price trades above the 50-day ~$72.35 and 200-day ~$59.30, which supports the uptrend. RSI is 63.67, showing firm momentum but not extreme. ADX at 33.48 confirms a strong trend, while the MACD histogram has slipped slightly negative. Bollinger middle band near $82.91 is a reference support, with the upper band around $89.74 acting as the first resistance.
Initial support sits near $83 to $83.50, the recent range and the middle band, with deeper support near the 50-day around $72.35. Resistance shows at $89.74, then $95, and $100, before the 52-week high at $107.57. Average true range near 3.59 suggests wider daily swings, so position sizing and stops matter.
Final Thoughts
ALGT stock now sits close to the median analyst target, and the Raymond James downgrade flags valuation risk after a 52% climb. The bull case rests on stronger fourth-quarter capacity, better margins, and stable cash generation. The bear case points to negative earnings, leverage, and a possible pause as buyers digest gains. Tactically, we would watch support at $83 to $83.50 and the 50-day near $72.35 for better entries. On breakouts, $89.74 and $95 are key hurdles. For longer-term holders, track margins, pricing, and cost trends to confirm that operations can backfill the recent move.
FAQs
It depends on your time frame. After a 52% six-month climb, shares trade near the median target of $85. If you seek a better risk-reward, consider waiting for support near $83 or the 50-day near $72.35. Long-term holders should watch margins and cash trends.
Price to sales near 0.60 and price to operating cash flow around 3.95 look reasonable. P/E is not helpful due to negative earnings, and price to book is distorted by tiny equity. Enterprise value to EBITDA screens high because EBITDA is depressed, so use a broader set of measures.
Support sits around $83 to $83.50 and deeper at the 50-day near $72.35. Resistance is near $89.74, then $95 and $100, with the 52-week high at $107.57. RSI near 63 and ADX around 33 show a firm trend, but swings are wider with ATR near 3.6.
A clean beat on revenue and margins, steady demand, and lower fuel costs could lift sentiment. Clear visibility on 2025 capacity plans and disciplined costs would help. If cash generation stays solid while leverage trends stable, valuation concerns may ease and targets could drift higher.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
