GET DAILY SIGNALSAlaska 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 RSI Oscillator ascending out of oversold territory
The RSI Oscillator for ALK moved out of oversold territory on October 22, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 28 similar instances when the indicator left oversold territory. In 22 of the 28 cases the stock moved higher. This puts the odds of a move higher at 79%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 30, 2026. You may want to consider a long position or call options on ALK as a result. In 56 of 74 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 76%.
The Moving Average Convergence Divergence (MACD) for ALK just turned positive on October 28, 2026. Looking at past instances where ALK's MACD turned positive, the stock continued to rise in 38 of 51 cases over the following month. The odds of a continued upward trend are 75%.
Following a +4.39% 3-day Advance, the price is estimated to grow further. Considering data from situations where ALK advanced for three days, in 218 of 287 cases, the price rose further within the following month. The odds of a continued upward trend are 76%.
ALK may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
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 74%.
The Aroon Indicator for ALK entered a downward trend on October 30, 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 Valuation Rating of 6 (best 1 - 100 worst) indicates that the company is seriously undervalued 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 (1.086) is normal, around the industry mean (2.022). ALK has a moderately low P/E Ratio (-22.459) as compared to the industry average of (5.747). Projected Growth (PEG Ratio) (0.310) is also within normal values, averaging (2.252). Dividend Yield (0.042) settles around the average of (0.028) among similar stocks. P/S Ratio (0.308) is also within normal values, averaging (0.529).
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 Price Growth Rating for this company is 73 (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 PE Growth Rating for this company is 98 (best 1 - 100 worst), pointing to worse than average 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 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 76, 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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