** Skywest SKYW.O shares rise as much as 2% to $101 in early trading after Raymond James raises airline's rating to "strong buy" from "outperform"

** Brokerage says co's strong balance sheet and significant unpledged assets, along with improving earnings momentum underscores favorable outlook

** Despite macro risks and headline-driven volatility in bookings, the demand rebound that began in early Q3 has gained momentum, with stronger implications for Q4, the brokerage says

** Raymond James also says valuation of co is attractive; stock is trading at 9.16 times forward 12-month earnings, compared with industry median of 8.73, according to data compiled by LSEG

** "While capacity growth is also stepping up in 4Q25, early indications are encouraging," Raymond James adds

** The broker notes SkyWest, Alaska ALK.N and Allegiant ALGT.O are best positioned to outperform in the sector, while JetBlue JBLU.O, American AAL.O United UAL.O are worst positioned

** All five brokerages covering stocks rate it "buy" with median PT $131.80 - LSEG compiled data

(Reporting by Amir Orusov)

((Amir.orusov@thomsonreuters.com))