Allegiant Travel shares gained 2.8% in pre-market trading on Tuesday after Raymond James upgraded the leisure airline's rating to Strong Buy from Outperform.
The brokerage cited a disproportionate selloff in the stock relative to fundamentals, noting that the shares had declined more than warranted by Allegiant's business performance. Raymond James maintained a price target of $116, down from its prior $138 target.
The upgrade follows a separate Strong Buy rating from Zacks Research on August 19. Raymond James highlighted Allegiant's potential for margin recovery, its flexible capacity model, and the scale benefits from the May acquisition of Sun Country Airlines as key strengths supporting the upgrade.
The broader market showed limited movement ahead of the open, with the S&P 500 down 0.2% and the Nasdaq falling 0.6%. While Allegiant's peers, including Southwest and Frontier, have been competing aggressively for market share on former Spirit Airlines routes, the article did not link any specific competitor activity to the stock's rise.
