On Friday, Canaccord Genuity updated its outlook on shares of Surf Air Mobility Inc (NYSE: SRFM), raising the price target to $4.00 from the previous $2.20, while the Hold rating on the stock remains unchanged. The adjustment reflects a more optimistic view of the company's future financial performance.
The firm cited Surf Air Mobility's ongoing efforts to revamp its core airline operations as a reason for the revised price target. The company's focus on high-margin Essential Air Service (EAS) flights and sought-after routes, such as those to Purdue and Williamsport with passenger load factors (PLF) of 75% or higher, are key factors in this reassessment.
Canaccord Genuity's increased price target is based on a discounted cash flow (DCF) analysis extending through to 2030. The new target also factors in an expectation of less equity dilution than previously anticipated under the GEM facility.
The analyst believes that a noticeable improvement in the profitability of flight operations throughout 2025 would act as a significant positive catalyst for Surf Air Mobility's stock. This potential uplift in operations is seen as a critical element to watch in the company's turnaround process.
The report concludes with a reminder that the new price target of $4.00 is grounded in long-term financial projections and the assumption of reduced equity dilution, signaling a cautiously optimistic outlook for Surf Air Mobility's financial trajectory.
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