An Airline Fare War Has Broken Out
Shares of Spirit Airlines have tanked over the past month, but Barclays isnt giving up on the low-cost carrier just yet.

Shares of the low-cost carrier Spirit Airlines (SAVE) have dropped more than 28% over the past month, after reports surfaced saying its pilots might need a pay raise and that United Continental (UAL) was stepping up its efforts to challenge Spirit by offering lower fares.

That said, Spirit's decline has made the stock more attractive to Barclays analyst Brandon Oglenski, but he isn't turning bullish right away, according to a note obtained by Barron's.

"Before we get too bullish on the stock, we want to wait a bit longer to see how competitive actions from larger airlines impact Spirit's ability to profitably expand capacity," Oglenski noted. "The company faces continuing headwinds from pilot negotiations, but we think the bigger issue driving the negative market reaction was commentary surrounding a renewed 'fare war' with legacy airlines."

While he accounts for headwinds facing Spirit coming in the form of increased pressures from larger carriers dropping fares, combined with "an already challenging operating environment," he still finds the stock to be "cheap."

"We admit Spirit shares trade relatively 'cheap', [but] we continue to see more favorable risk-reward opportunities in other airline equities."

Watch More with TheStreet:

More from Stocks

Sears Selloff Heads Into Second Straight Session as Stock Hits All-Time Low

Sears Selloff Heads Into Second Straight Session as Stock Hits All-Time Low

PepsiCo Spends $3.2 Billion to Help Save the Planet and Sell More Flavor Pods

PepsiCo Spends $3.2 Billion to Help Save the Planet and Sell More Flavor Pods

Elon Musk Wants Tesla Private But Electric Car Rival Fisker Wants to Go Public

Elon Musk Wants Tesla Private But Electric Car Rival Fisker Wants to Go Public

Jerome Powell, PepsiCo, Sodastream and Tesla - 5 Things You Must Know

Jerome Powell, PepsiCo, Sodastream and Tesla - 5 Things You Must Know

Here Comes a Tesla Roadster and a New Stock Market Record: Week Ahead

Here Comes a Tesla Roadster and a New Stock Market Record: Week Ahead