Why Frontier Group Holdings Stock Cruised 11% Higher This Week
Key Points
A pundit at one of the Big Four U.S. banks has flagged the airline industry as a potential recovery story for 2026.
Although he didn't select Frontier as one of his top picks, his bullish take on the industry helped improve sentiment in its stocks.
It was up, up, and away for Frontier Group Holdings (NASDAQ: ULCC) this week, and I'm not talking about the budget airline's planes. Thanks in no small part to a bullish note from an influential bank's analyst about its sector, investors snapped up shares of the company. Ultimately, according to data compiled by S&P Global Market Intelligence, Frontier's stock flew 11% higher over the period.
Increasingly clear skies
The pundit behind the note was Citigroup's John Godyn, who believes that 2026 will see the airline industry overcome several recent headwinds.
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According to reports, he wrote that airlines have struggled with challenges over the past year, including operational disruptions, tariffs imposed by the current presidential administration, and the lengthy government shutdown that hampered air traffic control.
Godyn wrote that these conditions will either ease or, in the best case, be non-factors, smoothing a flight path for a broad recovery in the sector.
In his view, however, some carriers will benefit more than others. He identified two in particular that he considers compelling buys at the moment, American Airlines Group and Alaska Air Group.
A beater in the budget bin
While Godyn didn't single Frontier out as an obvious stock buy, the analyst's general optimism on the airline sector as a whole provided reason enough to invest in almost any of its stocks.
Frontier is a compelling play because travelers are strongly motivated by price rather than brand loyalty these days. Since the recent tribulations of Spirit Airlines, Frontier is currently a top choice in the budget category.
Personally, I agree with Godyn's assessment, although I've always felt that the airline business is too volatile, too dependent on trends, and burdened with high costs to produce reliable investments. Still, for those determined to buy into it, Frontier isn'a a bad choice.
Citigroup is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Alaska Air Group. The Motley Fool has a disclosure policy.