Southwest Airlines shares (NYSE:LUV) rose 2.5% to $29.65 in premarket trading, following an upgrade from Evercore ISI, which raised the airline's rating to "outperform" from "in-line."
The brokerage cited Southwest's shift towards capacity discipline, new revenue initiatives, and the strong underlying value of its fleet as key factors behind the upgrade.
Evercore also lifted its price target (PT) for LUV to $35 from $30, representing a potential 21% upside from the stock's last close.
Currently, three brokerages rate Southwest Airlines as a "buy," eleven as "hold," and four as "sell," with a median price target of $27.40, according to LSEG data.
However, despite today's surge, Southwest Airlines' share price has risen only 0.1% year-to-date as of the last close.