Deutsche Bank is raising its earnings outlook for Republic Airways RJET based on the trajectory of earnings improvement observed since the start of the year as the company executes on the Frontier Airlines business plan (e.g. Sep Q results were the best in the company's history).
“Our new estimates reflect the shares issued in the company's recent add-on offering,” Deutsche Bank writes. “So, while our diluted 2011 EPS estimate is unchanged at $1.00 (vs. consensus of $0.93), the underlying net income forecast goes from $37 million to $51 million.”
Deutsche Bank said that, given the materially improved earnings outlook, “we are raising our price target from $6.50 to $13.00 to incorporate the valuations of regional and LCC comparables.”
Republic Airways closed Friday at $8.09.
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