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Shares of Allegiant Travel Co. still a Buy after 60 Minutes investigation, says Stifel analyst

Monday, April 16, 2018 5:49
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CBS’s 60 Minutes aired a segment on Allegiant Air, owned by Allegiant Travel Company (NASDAQ:ALGT), on Sunday night, revealing their findings after a seven-month-long investigation into the budget airline.

60 Minutes called Allegiant Air the “most dangerous” airline in the U.S.

“We found more than 100 serious mechanical incidents, including mid-air engine failures, smoke and fumes in the cabin, rapid descents, flight control malfunctions, hydraulic leaks and aborted take-offs,” said correspondent Steve Kroft.

Allegiant Air issued a statement in response to the investigation, saying that the report was “irresponsible and grossly misleading” and involved a “terminated employee currently involved in a lawsuit seeking money damages from the company.”

Nevertheless, Stifel analyst Joseph DeNardi maintained a Buy rating. While he acknowledged the investigation will likely have a short-term impact on bookings, he noted that Allegiant Air will be an “all A320 airline” within the next eight months and that its Q1 report will likely boost the share price.

Shares of the commercial airline were down 8.6% to US$151.05 on Monday morning.

Story by ProactiveInvestors


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