Jefferies is gaining a name in the airline space.
The firm began coverage of Southwest on Tuesday with a buy rating, in a split call named Delta and United and American as a sale. Analysts gave Southwest a $ 55 target, stating that the airline was best positioned to benefit from a return to domestic US travel.
Todd Gordon, founder of TradingAnalysis.com, is also positive on the Southwest, but is unwilling to buy.
“I would like to cautiously add Southwest to the portfolio,” CNBC’s “Trading Nation” said on Tuesday. “going into [the pandemic], They were better equipped – they had less debt, less expenses, and were focused on domestic travel. “
According to Gordon, the charts also support more upside. Based on a technical analysis, he said the stock could go on to break through $ 55 and then possibly break above $ 70 should the Kovid-19 vaccine become widely available. A move above $ 70 falls more than 50% upside and will mark a new high for the first time since December 2017.
Mark Weil Tepper, president of Strategic Wealth Partners, also sees Southwest as one of the best-positioned airlines as air travel slowly returns to normal, but he also cautions when to jump. .
Taper said during the same “Trading Nation” segment, “It’s still too early. I’ll wait a while.” “At least in the next few months the theme is more domestic than international travel and leisure on business travel, and when you look at the Southwest, they’ve got the highest percentage of seat miles coming from domestic flights and they are much more inclined Are on vacation for business. “
However, the question is whether investors have already exhausted that opportunity, he says.
“It is already priced a lot because Southwest is liking the JETS ETF by 18% this year,” he acted as the topper.
Southwest has grown by 92% in the last six months, while the JTS airline ETF has grown by 74%.