Allegiant Acquires Sun Country for $1.5 Billion in Cash Deal
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3h ago
0mins
Source: CNBC
- Acquisition Announcement: Allegiant has announced a $1.5 billion cash acquisition of budget airline Sun Country, with an implied value of $18.89 per share, indicating strong interest in the budget airline market.
- Shareholder Benefits: Sun Country shareholders will receive 0.1557 shares of Allegiant common stock and $4.10 in cash per share, representing a nearly 20% premium, which will enhance shareholder returns significantly.
- Market Challenge: This transaction will test the Trump administration's stance on airline mergers, especially given the Biden administration's recent blocking of JetBlue's acquisition of Spirit Airlines, potentially impacting future M&A activity in the airline sector.
- Industry Dynamics: As budget airlines face surging costs post-pandemic, Allegiant's acquisition strategy not only responds to market changes but may also reshape the competitive landscape of the U.S. airline industry.
Analyst Views on ALGT
Wall Street analysts forecast ALGT stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for ALGT is 71.56 USD with a low forecast of 55.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
3 Buy
5 Hold
1 Sell
Hold
Current: 92.470
Low
55.00
Averages
71.56
High
85.00
Current: 92.470
Low
55.00
Averages
71.56
High
85.00
About ALGT
Allegiant Travel Company is a leisure travel company focused on providing travel and leisure services and products to residents of under-served cities in the United States. The Company provides various travel services and products, including scheduled service air transportation, ancillary air-related products and services, third party products and services, and fixed-fee contract air transportation. The Company operates through Airline segment.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
