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Airline stocks priced for disaster that isn't going to come, says analyst

Airline stocks are priced for disaster right now, but that disaster isn't fundamentally sound, S&P Global Market Intelligence analyst Jim Corridore said Tuesday.

That means a good buying opportunity, he said.

"If you look at it on a valuation basis, these stocks are trading at levels we haven't seen in about a decade when the industry was fundamentally different — much more risky," Corridore said in an interview with CNBC's "Power Lunch."

While the airlines rallied Tuesday, they have been slammed over the last few months. Many are still sitting near 52-week lows, he said.

American Airlines plane
Getty Images

He's not particularly concerned about an impact from Brexit because Britain is a very small part of U.S. carriers' overall business. American is at risk for about 6 percent of its income, United is at risk for about 5 percent and Delta is at risk for about 3 percent, he said.

Even if there was a global slowdown, international travel only accounts for about 10 percent of U.S. airlines' revenues, Corridore said.

"The stocks are priced for a much worse outcome than we think is going to happen."

That said, while he doesn't see a global domino effect occurring at this point, he said people do need to consider the risk. However, "that is more than discounted into the stocks, looking at these valuations that we're seeing right now."

He has a "strong buy" rating on JetBlue Airways, United Continental, American Airlines and Delta Air Lines. He has a "buy" rating on Southwest Airlines and Spirit Airlines.

— CNBC's Jackie O'Sullivan contributed to this report.