Analyst: We're Upgrading Hawaiian Holdings; Company Is Responding To Competitors

In a report published Wednesday, Imperial Capital analyst Bob McAdoo upgraded the rating on

from In-Line to Outperform, and raised the price target from $24.00 to $27.00. In the report, Imperial Capital noted, "Hawaiian published an investor update prior to the market open on 3/24/15, which suggests Hawaiian has been successful in absorbing recent competitor capacity increases during the seasonally slower first quarter." McAdoo continued: "Looking forward to seasonally stronger periods, competitive capacity growth appears manageable, with most new capacity coming in markets currently not served by Hawaiian. In addition to better revenue trends, the company should continue to benefit from lower fuel prices in 2015." The analyst said the the combination of "fuel cost savings and meaningfully lower capex in 2015 and 2016" could benefit shareholders in the form of capital return. The stock is currently more than 20 percent off its 52-week high of $27.66 and because of that, he wrote, "we believe investors should accumulate shares ahead of the seasonally stronger summer period." The firm holds a $27 price target on Hawaiian Holdings. Shares closed Tuesday at $21.95.