TD Cowen has reduced its 12-month price target on Alaska Air Group Inc. (NYSE: ALK) to $63.00 from $64.00 while retaining a Buy rating on the shares, the firm said in analyst notes released on Friday. The new target still implies substantial upside from the stock's most recent market price of $53.30, and is consistent with a broader analyst consensus that registers a 1.27 recommendation rating in favor of the stock.
The change reflects an update to TD Cowen’s model to incorporate Alaska Air’s guidance for the first quarter and for the full year 2026. InvestingPro data cited by the firm shows that, despite several recent analyst downgrades, net income is expected to rise this year, with an EPS forecast of $5.62 for fiscal 2026.
TD Cowen highlighted a mixed but fundamentally constructive operating backdrop. Demand trends remain encouraging and the carrier has been executing on non-fuel cost containment, the firm said. Offsetting those positives, however, have been elevated West Coast fuel prices that the analyst described as having been "frustratingly volatile" over the past year.
Looking ahead, TD Cowen anticipates that Alaska Air will capture benefits from merger integration work in 2026 and 2027. The analyst noted that the shares appear attractive relative to the firm's bull-case scenario for 2027. The airline has also posted strong top-line momentum, with revenue up 21.34% over the last twelve months, a point cited in the firm’s analysis.
The revised $63 price target corresponds to a multiple of 8.5 times TD Cowen’s adjusted earnings-per-share estimate for 2027. By contrast, InvestingPro valuation metrics show Alaska Air trading at a trailing P/E of 63.67, while their Fair Value calculations suggest the stock may be slightly undervalued on that basis. For investors seeking additional context, InvestingPro offers an expanded Pro Research Report on the company.
Recent company-reported financial results provide further detail behind the analyst commentary. Alaska Air’s fourth-quarter 2025 earnings announcement included an adjusted EPS of $0.43, well ahead of the $0.11 analysts had expected. Revenue for the quarter was $3.63 billion, narrowly missing the consensus estimate of $3.64 billion. The earnings beat alongside a small revenue shortfall illustrates the company’s capacity to exceed profitability expectations even as top-line metrics slightly lagged forecasts. The post-release period saw stock price volatility, though specific intraday movements were not detailed in the available notes.
In sum, TD Cowen’s modest reduction in its price objective reflects updated guidance and modeling, tempered by persistent West Coast fuel-price volatility. The firm’s retained Buy rating rests on constructive demand, cost-control execution outside of fuel, anticipated merger-integration benefits across 2026 and 2027, and recent strong revenue growth.
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