Sun Country Airlines: Diversified Growth with Promising Cargo Expansion

Analyst Ravi Shanker of Morgan Stanley maintained a Buy rating on Sun Country Airlines Holdings (SNCY – Research Report), retaining the price target of $21.00.

Ravi Shanker has given his Buy rating due to a combination of factors that highlight the strengths and growth potential of Sun Country Airlines Holdings. The company stands out among its ultra-low-cost carrier peers due to its diversified business model, which includes Charter, Cargo, and Scheduled Service segments. This diversification provides a buffer against industry-wide challenges in maintaining utilization rates.
Shanker notes that the Cargo segment is particularly promising, with revenue per block hour up 20% year-over-year and plans to expand the fleet to 20 planes by the end of the summer. This growth is expected to drive earnings through 2026. Additionally, management’s focus on shifting growth from Scheduled Service to Cargo is proving beneficial, as close-in fares have increased, indicating a positive trend in bookings. Despite some management turnover, Shanker remains confident in the company’s ability to achieve normalized earnings, making SNCY a compelling investment opportunity.

In another report released on May 5, Evercore ISI also maintained a Buy rating on the stock with a $20.00 price target.

Based on the recent corporate insider activity of 86 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SNCY in relation to earlier this year.