If you’re looking for an airline stock to buy, consider Southwest Airlines. The stock is a “less leaky equity bucket” than rivals, according to Berenberg analyst Adrian Yanoshik, which may be as good as it gets in the sector these days.
Yanoshik upgraded Southwest (ticker: LUV) to a Buy rating on Tuesday, granting it a $45 price target, up from recent prices around $38. He downgraded American Airlines Group (AAL) to a Sell and Delta Air Lines (DAL) to a Hold, and maintained a Hold rating on United Airlines (UAL).
Alaska Air (ALK), meanwhile, joined American, United, and Delta in dropping change fees (to varying degrees). That leaves JetBlue Airways (JBLU), Spirit Airlines Spirit Airlines Inc. $17.73 0.12 (0.68%) Open $17.93 Volume 14.49M P/E Ratio 3.38 Div Yield N/A Market Cap $1.56B 17.19 18.73 (SAVE), and Allegiant Travel (ALGT) as the last major carriers to maintain change fees (along with privately held Frontier Airlines), though all are waiving the fees temporarily.
Eliminating change fees could help stimulate demand, but it’s also likely to intensify competition between the legacy and ultra-low-cost carriers, making for more competitive pricing in economy-class fares.