UBS Upgrades Alaska Air Group to Buy, Predicts Multi-Year Profit Surge

UBS has upgraded Alaska Air Group to Buy from Neutral, predicting a multi-year profit upswing driven by premium seating, loyalty growth, global routes, and synergies from its Hawaiian Airlines deal. The brokerage raised its price target to $90, a 60% increase from current levels, and lifted 2026 and 2027 earnings estimates ahead of Wall Street's view. UBS forecasts EPS of $6.94 in 2026 and $10.05 in 2027.

UBS has upgraded Alaska Air Group to a "Buy" rating from "Neutral," forecasting a multi-year profit upswing driven by strategic initiatives. The brokerage raised its price target to $90, a 60% increase from current levels, and lifted its earnings estimates for 2026 and 2027 ahead of Wall Street's view. UBS forecasts EPS of $6.94 in 2026 and $10.05 in 2027 Alaska Air Group’s earnings about to take-off, says UBS as it upgrades stock^[1].

The upgrade is based on several factors, including the expansion of premium seating to 29% of the fleet, which could add up to $400 million in revenue, and loyalty growth contributing another $200 million. The carrier's Seattle–Tokyo route alone is expected to add at least $140 million annually, with more international routes planned. Synergies from Hawaiian Airlines and planned share buybacks are set to account for more than 80% of Alaska’s projected EPS growth through 2027, according to UBS.

The brokerage noted that corporate demand is recovering and competition is easing in key markets such as San Francisco. UBS estimates that Alaska’s initiatives could fuel sustained revenue growth and cost gains, with a 200–250 basis point spread between revenue per seat mile and unit costs over 2026–27.

While the projected EPS growth from $3.27 in 2025 to over $10 in 2027 appears steep, it implies a 27% CAGR. UBS believes that Alaska’s $500 million synergy plan and buybacks should make the ramp achievable.