Frontier Stock Jumps on Analyst Upgrade and Route Expansion Plan

Sep 2 - Frontier Group Holdings ULCC jumped more than 10% on early Tuesday trading after Deutsche Bank raised its rating on the airline to "Buy" from "Hold". The move comes as Frontier looks well-positioned to pick up market share in the wake of Spirit Airlines bankruptcy.

Deutsche Bank analyst Michael Linenberg pointed out that Frontier already overlapped with about 35% of Spirit's route network during the third quarter. That overlap is expected to climb to roughly 40% by the fourth quarter, as Frontier rolls out 20 additional routes. Linenberg added that these expansion plans could strengthen Frontier's role as a leading low-cost carrier while giving the company an opportunity to capture a larger portion of Spirit's former customer base.

The analyst set an $8 price target on Frontier shares, representing a potential 63% upside from the previous closing price. Investors have been closely monitoring low-cost carriers as competition intensifies, and Frontier's expansion plans come at a critical time for the industry. With Spirit's exit reshaping the landscape, analysts believe Frontier could emerge as a significant beneficiary of the shifting dynamics in U.S. air travel.