Imperial Capital analyst Bob McAdoo released a note maintaining Southwest Airlines LUV Outperform rating and increased its price target from $33 to $35.
McAdoo believes that Southwest will continue to benefit from domestic industry trends, in addition to company specific catalysts. These catalysts include the expiration of Dallas Love Field restrictions and the potential of Southwest to utilize 737-800 aircrafts to grow capacity in new markets.
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Southwest seems likely to reach its full year ROIC target of 15 percent for 2014. McAdoo believes that this could be an inflection point for the stock in which the airline will begin to grow again. As mentioned before, with the utilization of 737-800 aircrafts, Southwest has identified 50 new markets.
Southwest was trading down around 0.59 percent at $28.67 in Thursday's pre-market.
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