JP Morgan Says Airline EPS Estimates Will Be Going Higher on Lower Fuel Costs - Buy Now (AMR) (JBLU) (DAL) (LCC) (UAL)

Airline stocks have a strong bid today following positive comments on the sector from analysts at JP Morgan, citing lower fuel cost. Two of the best performing stocks in the sector - AMR Corp (NYSE: AMR) and JetBlue (Nasdaq: JBLU) - were both upgraded by the firm.

JP Morgan noted that jet fuel prices have declined $0.30 per gallon since April 29, which represents a potential annualized industry benefit approaching $3.5 billion. During this time, not a single estimates has been revised the firm notes. The firm is recommending investors increase their exposure ahead of an expected upward surge in consensus estimates in coming weeks.

For the second time in as many week, JP Morgan is raising estimates and their price targets and upgraded AMR Corp (NYSE: AMR) and JetBlue (Nasdaq: JBLU) from Neutral to Overweight.

Price Target Hikes:
Alaska Air Group, Inc. (NYSE: ALK) (Neutral) from $64 to $66
AMR (NYSE: AMR) (Overweight) from $8.50 to $9.50
Delta Air (NYSE: DAL) (Overweight) from $18.50 to $20
JetBlue (Nasdaq: JBLU) (Overweight) from $7 to $8
Southwest Airlines (NYSE: LUV) (Neutral) from $11 to $14
United Continental (NYSE: UAL) (Overweight) from $41 to $47
US Airways (NYSE: LCC) (Overweight) from $13.50 to $18

The firm's industry operating profit estimates rise by approximately 20% in 2011 and approximately 30% in 2012, resulting in estimates that exceed consensus in nearly every case, with some estiamtes more than double the Street.

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