JPMorgan analysts upgraded JetBlue Airways (NASDAQ:JBLU) to Neutral from Underweight, setting a price target of $7 on the stock. The analysts noted that while the improved earnings forecast for 2025 doesn’t support a higher rating, JetBlue is positioned for potential upside.
They anticipate that JetBlue’s upcoming second quarter guidance might surpass consensus expectations, maintaining a top estimate of $0.10. Despite being one of the least favored airlines based on sell-side ratings, JetBlue could attract attention with new management poised to shift from previous loss tolerance. The presence of an activist shareholder and JetBlue’s strategic focus align with market trends favoring loyalty, premium services, and international exposure, albeit less aggressively than the major carriers.
The analysts suggest that while Southwest’s upcoming strategic updates might not impress, JetBlue could dominate the narrative around domestic airline turnarounds. The upgrade to Neutral reflects perceived limited downside risk and the introduction of a December 2024 price target of $7. From a credit standpoint, JetBlue’s substantial unencumbered asset pool is seen as robust enough to support upcoming financial obligations, including a significant convertible note due in two years.