10 Most Undervalued Industrial Stocks to Buy According to Analysts

5. Alaska Air Group Inc. (NYSE:ALK)

Forward PE: 14.4

Potential Upside: 25%

Number of Hedge Fund Holders: 56

Alaska Air Group Inc. (NYSE:ALK) is one of the 10 most undervalued industrial stocks to buy according to analysts. On June 4, Morgan Stanley’s Ravi Shanker reiterated a Buy rating on Alaska Air, while slightly lowering the price target to $83 from $85, still implying meaningful upside of over 75%.

The focus of Ravi’s update was Alaska’s strategic move into Europe, starting with a new Seattle-to-Rome route. In line with the management’s discussion at the last investor day, the street was expecting the company’s initial focus to be primarily on Asian destinations, with a European expansion coming at a much later period. Therefore, this expansion comes earlier than expected, which signals management’s intent to accelerate international growth.

Additionally, Rome was a top request from Mileage Plan members, and thus this underscores the airline’s customer-driven approach.

The analyst also sees this route as a key milestone in positioning Seattle as a major international hub. With plans to roll out new destinations each year and the potential upside from its pending integration with Hawaiian Airlines, Alaska remains Morgan Stanley’s preferred pick in the sector.

The analyst believes the transatlantic market currently offers better fundamentals than transpacific routes, making this a timely move for the airline.

Alaska Air Group Inc. is the fifth-largest airline company in the United States, operating three airlines: Alaska Airlines, Hawaiian Airlines, and Horizon Air.