Imperial Capital Hikes Southwest Airlines Price Target By 33%

In a note out Friday morning, Imperial Capital maintained its Outperform rating on Southwest Airlines Co LUV following record Q4 results. Imperial raised Southwest's 12-month price target to $64 from $48, a 33 percent increase.

Imperial expects Southwest to benefit from strong industry trends, including low fuel prices, as well as expansion to new airports. The company has recently restructured its hedged fuel positions to allow it to participate in the decline in jet prices.

The $64 price target is 16x the 2015 EPS estimate of $4.06, which Imperial Capital notes is in the middle of its 14-18x recent valuation range.

Shares of Southwest Airlines closed Thursday at $45.35, up 8.42 percent.