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On Monday, Citi analyst Stephen Trent (NSE:TREN) increased the price target for JetBlue Airways (NASDAQ:JBLU) stock to $5.00, up from the previous target of $4.25. The stock, currently trading at $4.76, has shown significant momentum with a 17% gain over the past week. Despite this adjustment, the firm retained a Neutral stance on the airline’s shares.
Trent acknowledged the efforts of JetBlue’s management in navigating current industry challenges. The airline has been actively managing its operations by cutting back on less profitable off-peak domestic flights and keeping a tight rein on operating expenses. Additionally, the airline is engaged in discussions to form an alliance, with United Airlines mentioned as a potential partner.
The analyst believes that a successful alliance with a major network like United could enhance JetBlue’s unit revenue and attract more customers through an expanded network. However, Trent noted that there has been no official statement from either JetBlue or United regarding such a partnership.
The report also highlighted concerns regarding JetBlue’s financial position. Despite the proactive measures taken by its management, there remains significant uncertainty about whether these efforts will be sufficient to reverse the airline’s free cash outflow and reduce its debt burden. Consequently, Citi continues to categorize JetBlue stock as Neutral/High Risk, reflecting the precarious balance between the airline’s strategic initiatives and its financial challenges.
In other recent news, JetBlue Airways reported its financial results for the first quarter of 2025, revealing a mixed performance. The airline’s earnings per share (EPS) of -$0.59 slightly surpassed analyst expectations, which had forecasted an EPS of -$0.61. However, JetBlue’s revenue fell short of projections, coming in at $2.14 billion compared to the anticipated $2.16 billion. Despite this revenue miss, JetBlue saw a 9% increase in loyalty revenues, indicating some positive momentum in customer retention and brand loyalty. Additionally, JetBlue is in discussions with United Airlines about a potential partnership, which could enhance customer connectivity and frequent-flier mile options. This comes after a federal judge blocked JetBlue’s previous Northeast Alliance with American Airlines (NASDAQ:AAL) in 2023. The proposed partnership with United Airlines is distinct from the American Airlines deal, as it will not involve coordinating schedules and pricing. Furthermore, JetBlue’s strategic focus remains on cost management and capacity adjustments, as the airline aims to navigate current financial challenges and improve its market position.
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