Key Takeaways
- SkyWest shares fell 13% today after it cut its 2026 EPS outlook to about $10.60 and said 2027 EPS should be similar.
- Analysts had expected $12.12 for 2027, and the drop roughly matches the cut those estimates now face.
- Delta and United are adding few seats, and SkyWest expects just 1% to 2% more block hours in 2027.
- SkyWest expects its Embraer E175 fleet to top 300 by the end of 2027.
SkyWest (SKYW) is down 13% today (trading at about $84) after it lowered its 2026 earnings outlook and told investors not to expect earnings growth in 2027 either.
That says as much about its customers as about SkyWest. Delta Air Lines (DAL) and United Airlines (UAL) are growing on fares and adding few seats, and even 18 new jets from Embraer (EMBJ) next year won’t add much flying.
Next Year Looks a Lot Like This Year
On Thursday’s call, CFO Rob Simmons cut the 2026 GAAP EPS outlook to about $10.60, from about $11 in July, mostly on fuel. Then he added: “For 2027, we expect block hour production to be up modestly in the 1% to 2% area from 2026 with EPS similar to 2026.”
In early October, consensus estimates had EPS climbing to $12.12 in 2027:
Analysts were already at $10.57 for 2026, so the real hit is 2027: a figure near $10.60 takes about 12.5% off that estimate.
SkyWest pays for fuel only on its prorate routes, and that bill nearly doubled to $66 million in the third quarter. Its operating margin slipped to 15.8% from 16.6%, even with depreciation $16 million lower after it stretched the E175’s useful life to 30 years:
The Majors Are Growing on Price
United’s capacity grew just 1.3% in the third quarter while revenue jumped 17%, mostly on a 16.8% rise in yield, and SkyWest’s schedule has no new E175s for United in 2027. Delta’s revenue rose 16% on flat capacity, which it also credits to higher yields. Delta takes 11 of the 18 new E175s, but those jets replace CRJs SkyWest already flies for Delta, and SkyWest is handing back the rest of the CRJ900s Delta owns.
Analysts see United’s EPS rising to $11.97 in 2027 from $7.20, and Delta’s to $7.30 from $5.41. Will fatter margins get either one to buy more regional flying?
That’s Embraer’s question too. SkyWest holds 33 E175 slots from 2028 through 2031 with no airline assigned, and slow seat growth at the majors won’t make them easier to fill.
TIKR Tracks 6 Analysts on SkyWest. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on SkyWest, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See SkyWest’s Analyst Ratings
SkyWest’s Drop Looks About Right
I’d sit tight. At Thursday’s close, shares traded at about 8x the $12.12 analysts expected for 2027, but at about 9.1x a 2027 near $10.60. That 12.5% gap between the Street and the guide is close to the size of today’s drop, so the market has already done most of the repricing.
Fuel is the swing factor: Simmons said every $1 a gallon below SkyWest’s $4.30 assumption for 2027 adds $1.20 a share.
So What Is SkyWest Stock Actually Worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
