ALK heads into July with the stock up 6% on the week, options traders at their most bullish in months, and a broadening analyst upgrade cycle that has the Street's mean target now sitting well above the current price.
The analyst story has accelerated since the prior note. BofA Securities raised its target this week to $65 from $60, maintaining Buy — the first bellwether move since UBS lifted to $62 on June 23. Evercore ISI also raised to $65 from $55 last week, keeping its Outperform. The direction of travel is unmistakable: every analyst action in the past ten days has been a target increase, and the Street mean has climbed to $59.75 against a stock now trading at $52.20. That implies roughly 14% upside at current levels. The one holdout remains Citigroup, which raised its Sell-side target to $47 from $32 on June 26 — a meaningful upward revision that nonetheless still sits below the market price, leaving the bear camp structurally isolated. The 30-day EPS momentum factor score ranks in the 99th percentile of all stocks tracked by ORTEX, an unusually strong reading that is almost certainly feeding analyst confidence ahead of the July 23 print.
Options positioning backs the bullish read. The put/call ratio has dropped to 0.29 — nearly two standard deviations below its 20-day average of 0.36 and close to the lowest level of the past year. That is an aggressively call-heavy posture, reflecting strong demand for upside exposure rather than hedging. The shift over the past six weeks has been consistent: the PCR was running above 0.55 in mid-May and has fallen in an almost unbroken line since. Where options traders were cautious heading into the spring volatility, they are now positioned for continued gains into earnings.
Short interest, however, has moved in the opposite direction this week — a contrast worth naming. After a modest decline through mid-June, the short base ticked higher by about 3.6% on the week to reach 10.7% of the free float, roughly 12.4 million shares. That is still a meaningful short position for a mid-cap airline, but the borrow market is not signalling any stress. Cost to borrow has eased to just under 0.5%, down 9% on the week — well within the range of a general collateral name. Availability is ample at 228%, having loosened significantly from the 165% low recorded in late May. The short score has crept up to 60.4, its highest reading in the trailing ten-day window, but the utilization rank sits in just the 24th percentile, confirming the short base is present but not tightly cornered.
The stock has gained 13% over the past month, broadly in line with the airline sector, which has seen DAL up 8% on the week and UAL up nearly 12%. ALGT has been the standout mover, up 13.6% on the week, while LUV and CPA have lagged. ALK's 6% week keeps it in the middle of the peer pack — stronger than Southwest and Copa, but trailing the network carriers. The EV/EBITDA multiple has contracted modestly over the past month, while the price-to-book has expanded to 1.3x as the stock has rallied, reflecting a market that is paying for earnings recovery rather than asset value. The 12-month forward EPS estimate is up sharply year-on-year, and the ev_ebit factor score ranks at a full 100th percentile — a sign that the stock screens as deeply cheap on operating earnings relative to enterprise value.
With Q2 results due July 23, the next three weeks will test whether the recent estimate upgrades and target raises have correctly anticipated the print, or whether the 10% float short — still rebuilding modestly this week — is carrying a more cautious read on margin trends.
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