Allegiant Travel Company: Here Comes the Sun (Country), Opportune Time to Buy Leader of New-Look LCCs

Research evidence excerpt

Allegiant Travel Company: Here Comes the Sun (Country), Opportune Time to Buy Leader of New-Look LCCs

J P M O R G A N North America Equity Research

01 July 2026

Initiation

Allegiant Travel Company Overweight

ALGT, ALGT US

Here Comes the Sun (Country), Opportune Time to Buy Price (30 Jun 26):$117.60

Leader of New-Look LCCs Price Target (Dec-27):$156.00

We are initiating coverage of Allegiant Travel Company with an Overweight rating Airlines

and a Dec 2027 price target of $156. The demise of the Ultra-Low-Cost Carrier AC James M Kirby

model has been widely reported given their paucity of premium, international, and (1-212) 622-8297

loyalty, which has driven a sustainable advantage for Legacy carriers. Spirit’s james.m.kirby@jpmchase.com

cessation of operations in early May (accelerated, though not caused, in our view, Jamie Baker

by fuel), preceded by its second bankruptcy filing in a 12-month span, is the most (1-212) 622-6713

notable proof point. But while many LCCs remain profit deficient, Allegiant has jamie.baker@jpmorgan.com

posted consistent operating margins competitive with, and at times topping, J.P. Morgan Securities LLC

industry leaders. We believe Allegiant has written the playbook for the next

generation of LCCs – one built on lower frequency and off-peak utilization to

Quarterly Forecasts (FYE Dec)

underserved secondary markets, ~70% of which offer no non-stop

Adj. EBITDA ($ mn)

competition in ALGT’s case. Additionally, we see meaningful upside following 2025A 2026E 2027E

the Sun Country Airlines acquisition, and we believe the current valuation merits Q1 122 167A

a premium to its peer set rating given 1) industry-leading margins and margin Q2 123 132

Q3 42 109

growth, 2) sustainable network advantages, particularly post the SNCY Q4 143 207