SkyWest (SKYW) Hits 52-Week High: Is More Upside Left?

Shares of SkyWest, Inc. (NASDAQ:SKYW) scaled a 52-week high of $60.65 on Mar 16, before retracing a bit to close the session at $60.3. In fact, the stock has performed very well in the past six months. While SkyWest has rallied 43.2%, the Zacks Airline industry gained 16.5%.

Catalysts Behind the Impressive Price Performance

SkyWest’s constant efforts to modernize its fleet and streamlining its operations are impressive. Also, the company aims to reduce the 50-seat jets in its fleet and add new E175 aircraft. To this end, it reported a decline in block hours (a measure of aircraft utilization) in February 2018. For the first two months of the year, the carrier reported a 2.8% decrease in block hours.

Moreover, SkyWest has a robust earnings surprise history, having surpassed estimates in each of the trailing 14 quarters. Evidently, in fourth-quarter 2017, this Zacks Rank #3 (Hold) carrier performed impressively, reporting better-than-expected earnings and revenues. We expect SkyWest to continue performing well in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In fact, a solid earnings track record generally works as a catalyst in boosting the stock price. This is because it indicates the company’s ability to surpass earnings estimates. More often than not, investors take into account a company’s buoyant earnings history while betting on the stock with the expectation that it will continue outpacing estimates in its next releases.

Furthermore, SkyWest’s expansion-related efforts are impressive. Also, its efforts to reward shareholders through dividends and share buybacks raise optimism on the stock. In February 2018, the company hiked its quarterly dividend by 20%. We note that apart from SkyWest, transportation stocks like Alaska Air Group, Inc. (NYSE:ALK) , Norfolk Southern Corporation (NYSE:NSC) and Union Pacific Corporation (NYSE:UNP) have hiked their respective dividend payouts this year.

Earnings Estimates on an Upswing

Upward estimate revisions reflect optimism about a stock’s prospects. SkyWest scores impressively on this front as well. The stock has seen the Zacks Consensus Estimate for current-quarter and yearly earnings being revised 5.1% and 14.3% upward, respectively, over the last 90 days.

Style Score

Additionally, the stock has an attractive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores.

Such a score allows investors to eliminate the negative aspects of stocks and select winners. However, it is important to note that each Style Score will carry a different weight while arriving at a VGM Score.

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