Citi upgrades Spirit Airlines to buy, says stock looks cheap after three months of weakness

Spirit Airlines aircraft seen at Los Angeles International Airport.
Alex Tai | SOPA Images | LightRocket via Getty Images

Low-cost air carrier Spirit Airlines looks cheap for investors, especially after a recent decline in its stock price, according to Citi.

Shares of the budget airline remain below their pre-pandemic levels and have dipped more than 13% in the past three months. However, the company released updated guidance on Monday that showed wider margins for the second quarter than previous projections.

Analyst Stephen Trent upgraded the stock to buy from neutral, saying in a note to clients on Tuesday that the stock's recent struggles "opened value in the shares" and the updated guidance helped to convince him it was time to buy the dip.