) and Midwest Express Holdings (MEH
) to market perform from market outperform.
Analyst Glenn Engel says Alaska Air's expansion plans are too aggressive for the demand environment. He widened his $1.52 2002 loss per share estimate to a $2.27 loss; he also cut his $1.30 2003 EPS estimate to $0.55 and his $3.85 EPS forecast for 2004 to $2.80 EPS. Engel notes that Alaska Air's relatively strong liquidity and balance sheet protected its share price, but a lack of EPS momentum limits upside.
As for Midwest, Engel says that despite the demise of its competitor Vanguard in Kansas City, the company's yields continue to fall short of his estimates. He notes that potential labor problems with the carrier's flight attendants add to an uncertain booking climate.