With myriad headwinds facing
Frontier Airlines (FRNT) and its industry as a whole, Zacks senior transportation analyst Ann Heffron, CFA maintains her Hold recommendation on the jet service carrier:
'We are maintaining our Hold on Frontier Airlines Holdings, Inc., as well as our $6 target price. FRNT reported 2008 first quarter EPS of $0.09 before nonrecurring items, a penny below our estimate, but still a good performance in light of weak traffic for April and May.
'Our estimate increases for fiscal 2008 (ending March 31) to a loss of $0.50 per share from a loss of $0.54 per share, and we are initiating our 2009 estimate at a loss of $0.05 per share. Increased competitive pressures from Southwest (LUV) and United Airlines (UAUA), high fuel prices and start-up costs at Lynx Aviation are obstacles to achieving sustained levels of profitability. FRNT pays no dividend.
'Competitive pressures are fierce, capacity continues to increase in its major hub of Denver, and the company continues to operate at a loss on an annual basis, with no end in sight. Our six-month price target of $6.00 represents 1.2X our estimate of book value 12 months hence, in line with its median value over the last twelve months.'
