Southwest Airlines (LUV) Stock Higher as Airline Industry Rallies
NEW YORK (TheStreet) -- Shares of Southwest Airlines (LUV) - Get Report are climbing 3.61% to $42.52 in late-afternoon trading on Tuesday after Deutsche Bank recommended purchasing shares of three of the airline's competitors.
The firm upped its rating to "buy" from "hold" on American Airlines (AAL), Delta Air Lines (DAL) and United Continental (UAL) stocks, noting that the industry as a whole is set to benefit from slowing capacity growth, currency shifts and a reasonable economy, Bloomberg reports.
"In light of the current valuations, we think downside is limited and that therefore investors can afford to be early given the rapidity in which airline share prices can appreciate once it becomes apparent that trends are indeed getting better," Deutsche Bank said.
The U.S. airlines index is up 5.97% this afternoon, marking its largest gain since November 2014.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B+.
Southwest's strengths such as its revenue growth, impressive record of earnings per share growth, increase in net income, expanding profit margins and good cash flow from operations outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: LUV
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.