Analyst Michael Linenberg, who raised his share-price target for American to $23 from $20, also upgraded Alaska Air (ALK) - Get Report, Delta Air Lines (DAL) - Get Report, Hawaiian Holdings (HA) - Get Report, United Airlines (UAL) - Get Report, JetBlue Airways (JBLU) - Get Report, Southwest Airlines (LUV) - Get Report, Spirit Airlines (SAVE) - Get Report and SkyWest (SKYW) - Get Report.
"We are upgrading our investment stance on the sector as COVID cases, hospitalizations, and vaccination rates are all trending in the right direction," Linenberg said in an investors note.
Linenberg also said he was "encouraged by the industry’s nonstop pursuit of numerous initiatives to mitigate the spread of COVID and increase the confidence of the flying public."
The analyst cited the U.S. airline industry's announced support for an international contact tracing program and International Air Transport Association's trial of Travel Pass.
That's a mobile application that is akin to a digital passport, enabling passengers to securely match an itinerary to local COVID-19 testing requirements and ensure that they are in compliance.
"Since the onset of the coronavirus pandemic, we have observed numerous instances of pent-up demand for air travel, particularly around peak periods and peak travel days, underscoring our view that consumers want to travel," Linenberg said.
The analyst said that U.S. consumers, on average, have fared relatively well during the pandemic and are on track to emerge with much lower credit card debt, higher home values and significant savings.