The rally for airline stocks should soon kick back into gear, and Southwest Airlines could be a winner for investors, according to Barclays. Analyst Brandon Oglenski upgraded the North American Airlines sector to positive from neutral, even as uncertainty remains around the return of business travel. Oglenski also upgraded Southwest to overweight from equal weight. "We are adding exposure to the group, but in a careful manner, favoring low cost and low fare airlines by upgrading Southwest Airlines to Overweight," Oglenski said Monday in a note to clients. Airline stocks jumped in the fourth quarter of 2020 as vaccines were approved. The rally extended through the first half of 2021, but cooled off over the summer. Shares of Southwest are up more than 16% year to date, roughly in line with the broader market, but trailing the returns for American and United . However, the low-cost airline seems like a safer play with growth potential for investors, according to Barclays. "Southwest affords long-term investors a fortress balance sheet, favorable orderbook with Boeing and a historically profitable business model. We see the company leveraging low cost Boeing MAX 737 deliveries to execute network expansion that was delayed pre-pandemic due to the MAX grounding," the note said. Barclays raised its price target on Southwest to $75 per share from $64. The new target is 38% above where the stock closed Friday. The Barclays call comes after a similar note from JPMorgan last week, where the firm upgraded Southwest and was bullish on the industry as a whole. —CNBC's Michael Bloom contributed to this report.
A Southwest Airlines flight logo is seen as the plane taxis to a gate at Long Island MacArthur Airport in Ronkonkoma, New York on March 25, 2021.