Citigroup Issues Sell Rating for Spirit Airlines Amid Price Target Cut

Citigroup's team of research analysts has downgraded their outlook for Spirit Airlines (NYSE:SAVE), changing the airline's status from a 'neutral' to a 'sell' rating. This significant shift was reported in an investor research note released on Thursday. The airline's stock now has a price target of just $4.00, a steep drop from the previous $13.00 target set by Citigroup. According to the updated price objective, this indicates a substantial potential decline of over 40% based on Spirit Airlines' last closing price.

Market Reactions and Brokerage Consensus

The downgrade by Citigroup adds to a series of mixed sentiments expressed by various brokerages towards Spirit Airlines. Recently, Bank of America initiated coverage on the airline, assigning an 'underperform' rating and setting a price target of $5.00. Conversely, Seaport Res Ptn revised their previous 'buy' rating to 'neutral,' and Susquehanna reaffirmed their 'negative' rating, lowering their price target from $15.00 to $5.00. Collectively, these analyses have contributed to a 'Reduce' consensus rating for Spirit Airlines, with an average price target now hovering around $8.80, as reported by MarketBeat.com.

Financial Health and Stock Performance

The financial health of Spirit Airlines has shown volatility, as reflected in their recent stock performance. Shares of Spirit began trading at $6.68 on the downgrade day, against a backdrop of a 50-day moving average price of $14.01 and a 200-day moving average of $15.38. Despite the ups and downs, with a year-low stock price of $4.04 and a high of $20.29, Spirit Airlines bears a market capitalization of about $728.71 million with a negative price-to-earnings ratio. The company also reported a qualified quick ratio and a debt-to-equity ratio of 2.31.

The last quarterly earnings report from Spirit cited a narrower loss per share than expected, but the overall financial results showed a year-over-year decline in quarterly revenues and a negative net margin. The forecasts by analysts aren't too optimistic either, as they project an EPS drop for the current fiscal year.

Institutional Investors’ Moves

Institutional investors have recently tweaked their holdings in Spirit Airlines. Noteworthy moves include Cibc World Markets Corp acquiring a new position valued at around $20.9 million, Cyrus Capital Partners L.P. boosting their stake by nearly 48%, and Dimensional Fund Advisors LP increasing their holdings substantially. Meanwhile, Alliancebernstein L.P. made a significant increase to their investment in the third quarter, reflecting a diversified interest by large financial institutions in the airline's stocks.

Understanding Spirit Airlines

Spirit Airlines, Inc. operates as a low-cost carrier offering services such as upgraded seating, baggage handling, and varied travel insurance options. It caters to a wide range of destinations across the United States, Latin America, and the Caribbean, aiming to provide affordable and flexible travel options to its customers.

Citigroup, Downgrade, Sell