Mesa Air's Wings Clipped By Uncertainties
www.forbes.com
04.26.05, 4:22 PM ET
Standard & Poor's Equity Research maintained a "hold" rating on Mesa Air Group (nasdaq: MESA - news - people ) after the regional airline reported strong first-quarter earnings. Mesa reported earnings of 26 cents per share compared with the consensus estimate of 22 cents per share. "However, we think several uncertainties hang over shares," said S&P Equity Research. "We believe Mesa's largest partner, US Airways, could go out of business. US Airways is also in talks to merge with America West (nyse: AWA - news - people ), another of Mesa's partners. We think a combined US Airways/America West could cut the amount of regional flying done by Mesa." The research firm lowered its price target on Mesa to $7 from $7.50, or seven times the 2006 earnings-per-share estimate, "a discount to peers due to uncertainty and the potential EPS hit that could result from reduction in flying by a major partner."