UPDATE: Deutsche Bank Upgrades Southwest Airlines to Buy on ROIC Outlook
Deutsche Bank upgraded Southwest Airlines Company (NYSE: LUV) from Hold to Buy and raised the price target from $11.00 to $15.00.
Deutsche Bank noted, "We are raising our rating on Southwest shares from Hold to Buy as we now believe the company is well-positioned to meaningfully improve its pretax ROIC. We think the company has turned the corner on its AirTran acquisition and should start to enjoy the fruits of various revenue (e.g. AirTran code sharing) and cost initiatives (e.g. growth of 737-800 inductions). Accompanying the P&L improvement, we think there will be further debt paydown and share buybacks. For the twelve months ended 9/30/12, Southwest's pretax ROIC was 7%."
Southwest Airlines closed at $10.91 on Monday.
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