UBS Starts JetBlue Airways (JBLU) at Sell, PT $3

UBS analyst Atul Maheswari initiates coverage on JetBlue Airways (NASDAQ: JBLU) with a Sell rating and a price target of $3.00.

The analyst comments "We think JBLU might beat 2Q estimates, but we see downside risk to 3Q and FY'25 estimates. The company had provided a conservative target for 2Q with implied revenue at mid-point of guide of -7.5% YoY. In our view, share gains from the Newark (EWR) situation likely helped JBLU in LaGuardia (LGA). Plus, we think the company had a solid Memorial Day weekend and likely saw improved close-in- strength in June. As such, we model -6.0% in revenues for 2Q vs. FS consensus at -6.4%. Our 2Q RASM estimate is -4.5% (VA cons. -4.2%) on ASMs -1.6% (VA cons. -2.0%). On costs, we estimate 6.5% CASM-ex increase, at the high-end of its 6.5-8.5% outlook as we think the company ran a strong operation and had less weather disruption in 2Q. Together, this drives our 2Q EPS estimate of -$0.31 vs. FS cons. -$0.34. From here, we forecast the company remaining unprofitable for the next several quarters, before turning a modest profit at EBIT level next year. To achieve profits next year, JBLU would need a meaningful acceleration in its revenue metrics next year. As such, we believe the risk-reward is tilted to the downside."

For an analyst ratings summary and ratings history on JetBlue Airways click here. For more ratings news on JetBlue Airways click here.

Shares of JetBlue Airways closed at $4.46 yesterday.

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