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Like the rest of the airline industry, Virgin is
being lifted by a sharp drop in oil prices that has pushed jet
fuel costs down to about $2.40 a gallon from over $3, the weekly
financial newspaper said in its latest edition.
"A profitable Virgin is benefiting from industry tail winds, but
there appear to be better values elsewhere in the hot sector,"
the report said.
With a small fleet and modest annual revenue, Virgin may have a
tough time growing, Barron's reported. It is expected to add
five planes in 2015 and another five in 2016, but has none on
order for the following years, it said.
Virgin America closed at $30 on Friday on Nasdaq, $7 above its
IPO price of $23 after touching a high of about $31.19 during
the session, valuing the airline at about $1.35 billion.
At the high, the stock traded 8.08 times 2013 earnings, compared
with Southwest Airlines Co's multiple of 37.43 and JetBlue
Airways Corp's 24.43.
Virgin America is the U.S. offshoot of billionaire entrepreneur
Richard Branson's London-based Virgin Group, which is involved
in airlines, railroads, telecommunications, media and
hospitality.
(Reporting by Caroline Valetkevitch in New York; Editing by
Jeffrey Benkoe)
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