Alaska Air (ALK, $60.06) looks to double orders on grounded Boeing (BA, $375.46) 737 Max
Even though many airlines have been cancelling their Boeing Max 737 orders following two fatal crashes, Alaska Air seems to be moving in the opposite direction, having doubled its orders despite the grounded situation of the aircraft.
Following the merger of Alaska Airlines and Virgin America in 2016, Alaska's management contemplated whether to keep Airbus planes or replace them with Boeing 737s – with the expectation of making a final call by end of 2017. But with the merger execution getting tougher than expected, leading to sharp profit erosion, Alaska's management had to postpone the decision as reducing near-term capex investment became the priority. So, Alaska Air chose different fleet types - Alaska flew only Boeing 737s while Virgin America used Airbus A320-family planes.
There are two main reasons why this decision is crucial. First, there is extra complexity in terms of incremental costs of maintaining mixed fleet. Second, replacing the vast majority of existing A319s and A320s with Boeing 737 MAX may also upgrade Alaska’s fleet to a more efficient technology much faster.
But isn’t it strange that Alaska is investing on an aircraft that is still grounded?
The answer may be no, as with nearly 100 successful flight tests Boeing has already developed software fix, cockpit changes, and enhanced pilot training procedures to prevent any future accidents. It expects that the grounding would be lifted by the summer of 2019.
Alaska’s pending decision to return to a single fleet type may give it the advantage to secure rock-bottom prices for up to a decade of aircraft purchases. As of the end of 2018, Alaska’s mainline passenger fleet consisted of 159 Boeing 737s and 71 Airbus A319s, A320s, and A321neos.
ALK's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for ALK turned positive on September 11, 2026. Looking at past instances where ALK's MACD turned positive, the stock continued to rise in 39 of 49 cases over the following month. The odds of a continued upward trend are 80%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 7 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +2.15% 3-day Advance, the price is estimated to grow further. Considering data from situations where ALK advanced for three days, in 218 of 285 cases, the price rose further within the following month. The odds of a continued upward trend are 76%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 30, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on ALK as a result. In 50 of 72 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 69%.
The 50-day moving average for ALK moved below the 200-day moving average on September 10, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ALK declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
The Aroon Indicator for ALK entered a downward trend on October 01, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 3 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 67 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.207) is normal, around the industry mean (3.112). ALK's P/E Ratio (94.143) is considerably higher than the industry average of (23.433). Projected Growth (PEG Ratio) (0.310) is also within normal values, averaging (2.252). Dividend Yield (0.000) settles around the average of (0.010) among similar stocks. P/S Ratio (0.308) is also within normal values, averaging (0.529).
The Tickeron Price Growth Rating for this company is 72 (best 1 - 100 worst), indicating slightly worse than average price growth. ALK’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 92 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ALK’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 73, placing this stock worse than average.
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General Information
a holding company, which through its subsidiaries, provides air transportation services
Industry Airlines
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