Analyst eyes big upside for Southwest Air shares
SAN FRANCISCO (MarketWatch) -- Shares of Southwest Airlines were the leading S&P 500 gainer Tuesday morning, rising 5% to $9.73 after an analyst projected the stock could soar 60% over the next 12 to 18 months. "Like many other airlines, Southwest is benefiting near term from a combination of lower fuel prices and better cost performance. However, the shares have lagged the airline group year to date and we believe that the upside to LUV's forward hedged position is greater than analysts might be pricing into the shares," Sterne, Agee analyst Jeffrey Kauffman said in a research note. He raised Southwest to a buy from neutral and hiked his stock-price target to $15 from $13. In addition, Kauffman lifted his 2012 profit estimate on Southwest to 97 cents a share from 83 cents. For 2013, he estimates Southwest will earn $1.35 a share. Southwest shares are down 14% over the last 12 months, compared with the 8% decline for the NYSE Arca Airlines Index .