Spirit Airlines Inc. was downgraded to equal-weight from overweight at Morgan Stanley following a guidance update late Thursday in which the airline said it expects a year-over-year unit revenue decline in the fourth quarter that's greater than the third-quarter decline. Margin guidance for the third quarter rose to 27% from the guidance range of 22% to 25%, prompted by better-than-expected unit costs. "Altogether, we believe the growth story, while still intact, has less appeal when margins compress closer to the industry average per our forecast," wrote Morgan Stanley in a note. The firm is also lowering the price target to $53 from $66. Spirit Airlines stock has dropped 14% today and 43% for the year so far. The S&P is down 1.6% for the year-to-date.
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