ALK
Alaska Air Group, Inc.
$33.54
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 25.5% below fair value
You pay
$33.54
Bear
$36.00
Fair
$45.00
Bull
$54.00
Bear
$36.00
+7.3%
$2.00 × 18x P/E
Fair
$45.00
+34.2%
$2.00 × 22x P/E
Bull
$54.00
+61.0%
$2.00 × 27x P/E
Adjust Assumptions
22.5x
2.0$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
16.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$52.86
Divergence from AlphaVal
15%
Summary
Applying a 22x P/E to adjusted EPS of $2.00, the base-case value is $45.00 per share.
Warnings
The company's reported profits differ from official accounting profits by 130%. Check what costs are being left out of the adjusted number.
The company pays out 164% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
This stock is 45% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples