Raymond James cuts JetBlue stock rating to Market Perform

On Thursday, Raymond (NSE:RYMD) James adjusted its stance on JetBlue Airways (NASDAQ:JBLU), downgrading the airline’s stock rating from Outperform to Market Perform. The decision came as the airline’s shares hit the target price of $5.00 set by the firm, following a tactical upgrade in April. Currently trading at $5.03, JetBlue’s stock has shown strong momentum with a 5% return over the past week, though it remains down 29% over the last six months according to InvestingPro data.

The Raymond James analyst maintained that their estimates for JetBlue remain the same since the April 29 post-earnings report. The analyst noted improvements in the global trade landscape, which have likely eased random pressures on JetBlue, as well as the broader U.S. airline industry. The analyst also acknowledged that while potential catalysts for JetBlue’s performance still exist, such as industry capacity consolidation related to Spirit Airlines (OTC:SAVEQ) and advancements in GTF-related Aircraft on Ground (AOG) issues, the recent surge in market sentiment has led to a more balanced risk/reward scenario for the airline’s shares. InvestingPro data reveals concerning fundamentals, including a significant debt burden with a debt-to-equity ratio of 3.85 and a weak overall financial health score.Want deeper insights? InvestingPro subscribers have access to over 10 additional exclusive ProTips and comprehensive financial metrics for JetBlue.

The analyst highlighted that despite the upgrade in sentiment and potential partnerships, such as the rumored collaboration with United Airlines, the current market position suggests a balanced risk/reward outlook for JetBlue. This assessment implies that while there may be positive factors at play, they are now adequately reflected in the stock’s current valuation. According to InvestingPro data, the stock trades with high price volatility, with analyst targets ranging from $3 to $8 per share, and 12 analysts have recently revised their earnings expectations downward.

The report also mentioned that in the event of a significant market or economic downturn, JetBlue is still considered a resilient player within the industry, without any immediate liquidity risks. This perspective underlines the airline’s stability and potential to withstand economic challenges.

Raymond James’ downgrade reflects a cautious approach to JetBlue’s stock, suggesting that while the airline has strong fundamentals and potential growth catalysts, the current share price accurately encompasses these factors, leaving little room for additional upside at this time.

In other recent news, JetBlue Airways reported its first-quarter 2025 earnings, revealing a mixed financial performance. The airline posted an earnings per share (EPS) of -$0.59, slightly better than the expected -$0.61, but its revenue of $2.14 billion missed the forecast of $2.16 billion. In a strategic move, SKY Leasing acquired JetBlue Ventures, the venture capital arm of JetBlue, which aims to leverage SKY’s industry connections while JetBlue maintains a strategic partnership with the subsidiary. Citi analyst Stephen Trent (NSE:TREN) increased JetBlue’s stock price target from $4.25 to $5.00, although the firm maintained a Neutral rating on the airline’s shares. Additionally, JetBlue and United Airlines have reportedly been in discussions about forming a partnership, which could enhance customer connectivity and frequent-flier mile opportunities, although no official statement has been made. JetBlue announced the appointment of Vijay Raman as the new vice president of sales and revenue management, bringing over 20 years of experience to optimize the airline’s revenue strategies. These developments underscore JetBlue’s ongoing efforts to navigate industry challenges and enhance its financial stability.

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