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SkyWest to Receive $233M in Payroll Support From U.S. Treasury

SkyWest Airlines will receive $233 million in PPP Loans to help it pay for the wages and other benefits of thousands of SkyWest Airlines employees.

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This article was originally published by TipRanks.

SkyWest Airlines will receive $233 million from the U.S. Treasury Department to help it pay for the wages and other benefits of thousands of SkyWest Airlines employees.

SkyWest Airlines, a subsidiary of SkyWest, Inc. (SKYW), has already received half of the funds and will receive the second half next month.

$40 million will be in the form of a ten-year, low interest unsecured bond, and SkyWest will issue warrants to the U.S. Treasury Department to buy approximately 98,815 SkyWest shares at a strike price of $40.41.

Certain conditional restrictions have been placed on SkyWest, including limitations on involuntary terminations, restrictions on the payment of dividends and the repurchase of shares, as well as certain limitations on executive compensation. (See SKYW stock analysis on TipRanks)

Deutsche Bank analyst Michael Linenberg downgraded SkyWest from Buy to Hold last month but raised his price target from $39 to $45. This implies upside potential of around 8% from current levels.

Linenberg is positive about the long-term prospects of the airlines sector, despite airline stocks being around fair value valuations for 2022. Investor sentiment has been given a boost recently with positive developments around COVID-19 vaccines.

Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Hold. The average price target of $51.33 suggests upside potential of around 23% over the next 12 months.

SKYW scores a 7 out of 10 on Tipranks’ Smart Score rating, indicating that it is likely to perform relatively in line with market averages.

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The post SkyWest to Receive $233M in Payroll Support From U.S. Treasury appeared first on TipRanks Financial Blog.

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