Susquehanna slashes shares of Hawaii Holdings PT as Japan's economic recovery slows



Susquehanna adjusts its outlook Wednesday Hawaii Holdings (Nasdaq: ), lowered its target price to $14.00 from $15.00 while maintaining a neutral rating on the company's stock. The revision comes in light of a slow rebound in travel demand from Japan and Maui, which has impacted the airline's financial performance.

The company pointed out that Hawaii Holdings' first-quarter profit missed expectations, with adjusted earnings per share of -$2.77, below expectations of -$2.75 and the consensus estimate of -$2.74. Despite strong operating results, results were impacted by weak offline financials. This difference is the main reason why Susquehanna's forecast performance is slightly better than expected.

Analysts at Susquehanna stressed that for Hawaiian Holdings to cope with the current challenges, routes from the United States to the mainland, U.S. point-of-sale (PoS) outbound international services, and inter-island services will need to compensate for the slower recovery of the global economy. The company's traditional strong market.

Margins are expected to improve in the second half of 2024 as the company begins to benefit from the launch of Boeing's (NYSE:) 787 and an emerging partnership with Amazon (NASDAQ:) for cargo services. These strategic measures are expected to provide some relief to profit margins, which have been under pressure due to the slowdown in recovery in major international markets.

Hawaiian Holdings' current financial performance and prospects reflect the dynamic nature of the aviation industry, which is affected by a variety of factors, including international travel demand and fleet efficiency. The company's ability to adapt to these market conditions is critical to its future financial stability.

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Investment Professional Insights

As Hawaiian Holdings (NASDAQ: HA ) navigates a challenging time in the travel industry, InvestingPro insights provide a deeper look into the company's financial health and market position. As mentioned in one of InvestingPro's tips, Hawaiian Holdings has a market capitalization of US$668.85m and has a heavy operating debt load, which may make it difficult to pay interest on that debt. This is especially important given that the company's adjusted price-to-earnings ratio for the trailing twelve months to Q1 2024 was -2.11, indicating investor concerns about its profitability.

Despite quarterly revenue growth of 5.38% in the first quarter of 2024, the company's gross margin remains low at 3.71%, highlighting concerns raised by Susquehanna about financial performance. This is consistent with another tip from InvestingPro, highlighting soft gross margins. Additionally, the stock has experienced significant price gains over the past six months, returning 200%, but currently trades at a whopping price-to-book ratio of -16.63. This could be a sign that the stock's recent performance may not be sustainable in the long term, especially if profitability remains elusive.

For investors interested in a thorough analysis, there are additional InvestingPro Tips available that can provide further guidance on whether Hawaiian Holdings is a prudent investment choice.To explore these insights and more, consider using the coupon code PRONEWS24 Enjoy an additional 10% discount on annual or two-year Pro and Pro+ subscriptions at InvestingPro. Remember, these indicators and tips are critical to making informed decisions in today's volatile market.

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