Goldman Sachs is betting that a recent merger will drive sharp gains for this travel stock

Allegiant Travel will continue to be a winner now that it closed its acquisition of Sun Country Airlines, according to Goldman Sachs. The bank this week upgraded the airline to buy from neutral. Its price target of $125 implies upside of 30% from Wednesday's close. Allegiant Airlines announced in January it would acquire Sun Country in a $1.5 billion cash and stock deal. In a press release , CEO Gregory Anderson said bringing the two budget-friendly airlines together will create a "more differentiated and durable airline". Shares have already outperformed, rising 18.5% this year while the S & P 500 is up just around 10%. And Goldman Analyst Catherine O'Brien thinks the deal will provide more growth opportunities for the company. ALGT YTD line Allegiant Travel Company has grown 18.5% this year "The merger drives incremental, profitable growth opportunities into an improving industry competitive environment, with a unique fuel hedge, at an attractive valuation," she said in a note to clients dated Tuesday. Allegiant and Sun Country will have a combined fleet of 195 aircraft. O'Brien broke down that the larger fleet will allow the two to use their aircrafts more efficiently, highlighting that Allegiant's recent purchase of a Boeing 737 will allow Sun Country to utilize Allegiant's aircraft for its flights, creating a larger network. Spirit's closure also gives the newly Allegiant more pricing power, according to Goldman. …