Analyst Susan Donofrio said in a note to investors that she added the carrier to her list of airline stocks "given our expectation of a focused and competitive management team with new tools (able to better use revenue management system and inclusion in global distribution systems now)."
Donofrio noted the impact that Boeing's (BA) - Get Report troubled 737 Max jet had on the airline industry. Carriers worldwide began holding off flights on Max jets following a pair of fatal crashes in Ethiopia and Indonesia this year that killed more than 324 people.
Southwest's ownership of 34 of the grounded planes has caused about 180 daily flights to be canceled.
"This past summer, although a healthy revenue environment, was a choppy one for airline investors as they had to deal with upcoming uncertainty over the timing of Max deliveries and what that means for supply along with global, economic and trade tensions," Donofrio said.
She added that Southwest "will now be able to fully utilize its new revenue management system and more efficiently schedule its aircraft as the Maxs are reintroduced into its system.
"We also like Southwest's move to join Travelport and Amadeus Travel Platforms global distribution systems as we think that it gives the airline a new growth platform with small to medium businesses," Donofrio said.
Regarding the 737 Max, she said, "Our overall assumption is that the MAX is likely to start being delivered and ungrounded in December 2019."
In July Southwest Airlines reported record second-quarter earnings as new routes and strong air-passenger traffic offset the ongoing impact of the 737 Max grounding.