Surprising Reasons Airline Stocks May Surge Even If There Are Ticket Price Wars

Airline stocks have been beaten up enough. Here's one potential catalyst that could send them back into orbit.
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Battered airline stocks could climb once again in the not too distant future, says one leading Wall Street analyst. 

And it's not because of an expected plunge in oil prices over the next six months. 

"We continue to think the airline industry is fundamentally misunderstood by the market," says Stifel managing director Joseph DeNardi. The aerospace expert added, "Most investors believe the primary source of income for an airline is selling airfare to passengers -- in reality, airlines make just as much, or more, money selling points to credit card companies -- we think that's where investors should be focusing on."

DeNardi also sees another bullish aspect to airline stocks that investors are overlooking. 

"Within the next 12 months, it's likely that an airline does something to prove to the market how valuable their marketing company is -- Delta is most likely the first mover." DeNardi thinks Delta could monetize its marketing company by selling a part of it to private equity, which could have the effect of boosting the company's overall valuation. 

Airline stocks have been crushed this year on fears of capacity growth, higher oil prices and fare wars. Shares of Delta (DAL) - Get Report , Southwest Airline (LUV) - Get Report and Jet Blue (JBLU) - Get Report have tanked an average 14% year to date. 

Watch more from Stifel's 2018 Cross Sector Insight Conference here.