(By Balachander) Deutsche Bank upgraded its rating on shares of Allegiant Travel Co. (NASDAQ:ALGT) to "Buy" from "Hold" and raised price target on the stock to $90 from $60.
The past 18 months has been a period of transition for ALGT as it inducted a new aircraft type, gained ETOPS approval, commenced service to Hawaii, and increased its MD-80 seating density, the bank said.
ALGT's March quarter marked the return of margin expansion and DB expects that trend to continue through 2012 and into 2013.
"Our new 12-month price target of $90 is derived by applying an 18x P/E multiple to our revised 2013 EPS estimate of $5.00 (vs. prior $4.00)," the bank wrote in a note.
Las Vegas, Nevada-based Allegiant Travel operates as a leisure travel company in the United States. The company provides scheduled air transportation on limited frequency nonstop flights between small city markets and leisure destination
ALGT shares, which have been trading in the 52-week range of $40.31 to $75.93, added 3.29 percent to trade at $72.76 on Wednesday.