What happened

Shares of Spirit Airlines (NYSE:SAVE) traded up as much as 5% on Wednesday after the company received a double upgrade from one influential Wall Street analyst. The analyst believes the worst of the pandemic is now behind us, and he's excited about what the future holds for the airline industry.

So what

The airlines endured a miserable 2020, weighed down by the pandemic and its impact on travel demand. But as vaccine rollouts gather pace, demand is beginning to recover, and investors are warming to the stocks.

A Spirit plane coming in for a landing.

Image source: Spirit Airlines.

JP Morgan analyst Jamie Baker gave the "all clear" signal on Wednesday, upgrading Spirit from underweight to overweight and raising his price target to $54 per share from $31. Baker upgraded a number of airlines, writing that he believes the pandemic will have no permanent, negative margin impact on the sector.

Baker said that while the pandemic did have a material impact on Spirit's profitability, he sees "material upside" relative to his price target.

Now what

We said last summer, as some were still questioning whether airlines would be able to survive, that Spirit could be among the first airlines to recover from the pandemic. While business and international travel could take years to return, Spirit's business is focused on leisure travel and tourist destinations. That's where the pent-up demand is right now, and those customers are fueling the recovery.

Spirit shares are up more than 100% since that recommendation and up 50% year to date. In fact, there's a case to be made that the stocks have gotten ahead of the recovery. But for long-term focused investors able to ride through potential additional turbulence should the pandemic recovery not go as planned, there is clearly opportunities here for Spirit to grow over time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.