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UPDATE: Stifel Steps In After Airline Selloff

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Airline stocks have come under fire as the Iraqi conflict has moved oil higher.

Analysts at Stifel stepped in Tuesday morning with an upgrade to Buy on Southwest Airlines (NYSE: LUV). More specifically, the research house is generally bullish on US airlines.

Joseph DeNardi at Stifel commented, “We believe the recent pullback in airline share prices offers an attractive entry point as we expect the focus to shift away from the negative data points of Lufthansa and Iraq towards the strong performance airlines are likely to report over the next few quarters.”

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Among exposure in the right places, DeNardi commented on another catalyst. “Currently, bag fees are subsidized by Southwest’s investors with its “bags fly free” marketing campaign; however, we believe that, eventually (~2016), Southwest will have the capability to add bag fees and likely will, which creates a compelling source of untapped earnings growth.”

The $30 price target (12.2 percent upside) is based on a 15 times forward PE ratio and seven times EV/’ EBITDAR.

Latest Ratings for LUV

DateFirmActionFromTo
Feb 2015Edward JonesDowngradesBuy
Jan 2015Credit SuisseUpgradesNeutralOutperform
Jan 2015Deutsche BankMaintainsBuy

View More Analyst Ratings for LUV
View the Latest Analyst Ratings

Posted-In: Iraq Joseph DeNardi StifelAnalyst Color Upgrades Analyst Ratings

 

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