Allegiant Travel (ALGT) Acquires Sun Country Airlines (SNCY) in $1.5 Billion Deal
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: seekingalpha
- Acquisition Overview: Allegiant Travel has announced a cash-and-stock deal valued at approximately $1.5 billion to acquire Sun Country Airlines, including about $400 million in debt, positioning Allegiant as the 9th largest U.S. airline with a market share of around 2.6%.
- Shareholder Benefits: Sun Country shareholders will receive $4.10 in cash plus 0.1557 Allegiant shares per share, totaling $18.89, which represents a roughly 20% premium over current stock prices, enhancing shareholder appeal.
- Market Impact Analysis: Analysts note that this merger signifies a return to consolidation in the U.S. airline industry, potentially affecting the competitive landscape, particularly regarding the number of bidders for Spirit Airlines' assets.
- Industry Outlook: Bank of America analysts believe this transaction will help improve overall industry growth and margins, especially in a sector struggling with growth, highlighting the positive implications of consolidation.
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: 94.970
Low
55.00
Averages
71.56
High
85.00
Current: 94.970
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.
