Fourth-quarter adjusted profit is guided at $0.50 to $1.50 a share with fuel near $4.80 a gallon. I model $10 of 2027 earnings at ten times, a $100 stock, a market-like return from $95.62.
Key points
- $0.50, $1.50 is fourth-quarter adjusted EPS guidance at about $4.80 a gallon of fuel.
- $6.72, $7.22 is implied 2026 adjusted EPS once the first three quarters’ $5.72 is added.
- 10 times $10 of 2027 earnings is a $100 stock, 4.6% above $95.62 with no dividend.
The call
The price of $95.62 needs about $9.50 to $10.00 of 2027 earnings at ten times, a typical airline multiple when fuel is high and leverage is 2.4 times. That is what the market is paying today, not a discount.
I believe 2027 earnings land near $10 a share as yields stay firm and capacity grows modestly, but fuel and labor keep the multiple at ten times. The stock then finishes near $100, tracking the market.
Adjusted EPS by quarter versus Q4 guideCompany reports and Oct 20 2026 investor update. Q4 2026E is my midpoint of company range.
Valuation
| Item | Figure |
|---|
| 2026 YTD adjusted EPS | $5.72 |
| Q4 2026E midpoint | $1.00 |
| 2027E EPS (mine) | $10.00 |
| Multiple | 10 times |
| 12-month target | $100 |
Ten times is the long-run network-carrier multiple when net leverage is mid-2s and fuel is volatile. Upside if fuel falls $0.45 a gallon is about $1 of fourth-quarter EPS; downside if demand cracks is a 7, 8 times multiple on lower earnings.
Operating margin, eight quartersSEC company facts through June 2026; Q3 2026 GAAP operating margin from Oct 20 8-K.
Risks
- Fuel stays above $4.80 a gallon into 2027; watch Gulf Coast jet and the next investor update.
- Labor or delivery delays lift CASM-ex after the guided step-down; watch unit-cost prints.
- A recession cuts contracted business, which rose 26% in the third quarter; watch close-in bookings on the next call.
What would change my mind
A fourth-quarter print above $1.50 with fuel still near $4.80, or a 2027 margin path clearly above 8%.