UBS Starts Frontier Group Holdings Inc (ULCC) at Neutral

UBS analyst Atul Maheswari initiates coverage on Frontier Group Holdings Inc (NASDAQ: ULCC) with a Neutral rating and a price target of $4.00.

The analyst comments "We see a good chance that ULCC reports 2Q in-line with its outlook. More than halfway into 2Q (on May 20th), ULCC cited that it was tracking in-line with its guidance provided on May 1st. We model RASM +1.2% for 2Q (guidance +LSD% stage adjusted). On costs, we believe 2Q was heavily inflationary as ULCC cut close-in capacity in response to the rapid deterioration in demand. Plus, 2Q likely had less sale-leaseback gains YoY. Together, this drives our expectation of +23% YoY CASM-ex increase in 2Q. In sum, our 2Q EPS estimate is -$0.28 vs. FS cons. -$0.27 (guidance -$0.23 to -$0.37). From here, co. guidance and cons. call for an inflection in ULCC's P&L and a return to profits in 2H. We believe ULCC will need to provide evidence of a strong improvement in 3Q RASM growth YoY for the market to get confidence that 2H profit is indeed achievable."

For an analyst ratings summary and ratings history on Frontier Group Holdings Inc click here. For more ratings news on Frontier Group Holdings Inc click here.

Shares of Frontier Group Holdings Inc closed at $4.15 yesterday.

You May Also Be Interested In

• Wells Fargo Starts X4 Pharmaceuticals (XFOR) at Overweight
• Coca-Cola (KO) PT Raised to $95 at BofA Securities
• Raymond James Starts Alpha Cognition Inc (ACOG) at Outperform