Raymond James Sees Attractive Entry in Spirit Airlines (SAVE) and Raises Rating to 'Strong Buy'

(Updated - August 4, 2016 9:57 AM EDT)

Raymond James upgraded Spirit Airlines (NASDAQ: SAVE) from Outperform to Strong Buy with a price target of $59. Analyst Savanthi Syth thinks fears are "baked in" and she sees an attractive entry point.

"Admittedly, there is a lack of near term catalysts and Zika is likely to remain a headline risk. Nevertheless, we believe the recent weakness in shares have created a very attractive entry point with ~11% downside/~49% upside," said Syth.

The analyst added, "While domestic pricing is unlikely to return to the 'glory days' of 2012-14, y/y pressures are set to moderate significantly as Spirit slows its capacity growth, competitive capacity trends continue to improve, and y/y comparisons ease. Moreover, we believe the introduction of an entry-level offering at American/United by YE16 (similar to Delta’s Basic Economy) should be a modest positive (neutral at worst) and more so in a rising fuel price environment. Additionally, we believe concerns over Spirit’s new market strategy and ULCC overlap is overdone."

For an analyst ratings summary and ratings history on Spirit Airlines click here. For more ratings news on Spirit Airlines click here.

Shares of Spirit Airlines closed at $39.53 yesterday.

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