FMP
BofA Securities Upgrades JetBlue to Neutral, Shares Surge 7%
Sep 9, 2024 7:59 PM - Davit Kirakosyan(Last modified: Sep 10, 2024 1:55 AM)
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JetBlue Airways (NASDAQ:JBLU) shares rose more than 7% intra-day on Monday after BofA Securities analysts upgraded the company from Underperform to Neutral, raising the price target to $6.00 from $3.00.
The analysts cited stable air travel demand, as indicated by TSA throughput, and moderated domestic capacity, along with declining fuel prices, as positive industry trends. JetBlue's ongoing self-help measures, highlighted in a recent investor update, further support the airline's improved outlook. Despite high net leverage remaining a risk, the analysts see improving fundamentals and a favorable industry backdrop as justifying the upgrade. The new price target is based on a valuation of approximately 6.0x 2025 EBITDAR, marking a shift from the previous EV/Sales methodology as losses are expected to decelerate through 2026 due to strengthened business performance.
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