Southwest Airlines (LUV): New Planes Drive EBITDA Growth - Bernstein

Bernstein analyst, David Vernon, reiterated his Outperform rating on shares of Southwest Airlines (NYSE: LUV) and raised his price target to $70 on the belief that the company will see more benefit from lower fuel burn than its peers as a result of the new 737MAX aircraft.

The analyst believes that this equipment can drive a >5% improvement in fuel burn per ASM as compared to the current fleet. If applied to 2016 numbers, this equates to a ~3% improvement to EBITDA with additional potential upside from lowering the company's sensitivity to oil price (and therefore its requirement to hedge fuel).

The new PT of $70 is up from $66.

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

Shares of Southwest closed at $60.67 yesterday.

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