Shares of Sun Country Airlines Holdings, Inc. (SNCY) surged 11.03% on October 31, 2024, fueled by a bullish analyst rating and the company's solid third-quarter earnings results, which highlighted the growing significance of its cargo business with Amazon.
The stock rally was primarily driven by a reiterated "Buy" rating from TD Cowen analyst Helane Becker, who set a price target of $20 for SNCY. This positive analyst coverage likely boosted investor confidence in the company's prospects, contributing to the upward movement.
Additionally, Sun Country reported record third-quarter revenue of $249 million, driven by growth in its cargo and charter segments. While scheduled passenger revenue declined due to industry overcapacity, cargo revenue grew 11.9% year-over-year to $29.2 million, and charter revenue increased 7% to $51 million.
The company's management team expressed optimism about future revenue and margin trends, citing positive booking trends for the winter season and ongoing industry capacity rationalization. Sun Country's diversified business model, with its cargo and charter operations offsetting weakness in scheduled passenger operations, has positioned the company for resilient profitability throughout industry cycles.
Notably, Sun Country's cargo business, which includes flying for e-commerce giant Amazon, is a key growth driver for the company. The airline is expecting a significant increase in cargo flying in 2025 as it adds eight more aircraft to its Amazon fleet, bringing the total to 20 aircraft. This expansion is part of an extended agreement with Amazon that runs until October 2030, providing a stable revenue stream for Sun Country.
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