UBS Sets Price Target of $3.00 for JetBlue Airways with "Sell" Rating

UBS analyst Thomas Wadewitz has given JetBlue Airways (JBLU) a "Sell" rating and a new price target of $3.00, down from a previous target of $3.00. The average one-year price target for JBLU is $4.38, with a high estimate of $9.00 and a low estimate of $3.00. The average brokerage recommendation is 3.5, indicating a "Hold" status. The estimated GF Value for JBLU in one year is $6.47, suggesting a potential upside of 46.05% from the current price of $4.43.

UBS analyst Thomas Wadewitz has downgraded JetBlue Airways (JBLU) to a "Sell" rating with a new price target of $3.00, down from a previous target of $3.00. This move comes amidst concerns over the airline's profitability and financial health.

The average one-year price target for JBLU is $4.38, with a high estimate of $9.00 and a low estimate of $3.00. The average brokerage recommendation is 3.5, indicating a "Hold" status. The estimated GF Value for JBLU in one year is $6.47, suggesting a potential upside of 46.05% from the current price of $4.43 [1].

The downgrade follows UBS's concerns about JetBlue's ability to service its substantial debt burden and rapidly depleting cash reserves. UBS expects JetBlue might beat second-quarter estimates but sees downside risk to third-quarter and full-year 2025 forecasts. The investment firm notes that JetBlue had provided conservative second-quarter guidance with implied revenue at the mid-point of -7.5% year-over-year [2].

JetBlue's financial challenges are compounded by its ongoing efforts to improve customer service and expand its market presence. The airline has recently introduced new features aimed at enhancing customer experience with checked luggage, such as real-time bag tracking via its mobile app and support for Apple AirTags. Additionally, JetBlue has expanded its Insider Experience program to San Juan, Puerto Rico, offering travelers complimentary services and guided tours as part of its vacation packages [2].

Despite these efforts, UBS believes that JetBlue will remain unprofitable for the next several quarters before turning a modest profit at the EBIT level next year. This would require a meaningful acceleration in revenue metrics, leading the firm to conclude that "the risk-reward is tilted to the downside" [2].

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References:
[1] https://uk.investing.com/news/analyst-ratings/jetblue-stock-initiated-with-sell-rating-by-ubs-on-profitability-concerns-93CH-4158968
[2] https://finance.yahoo.com/quote/JBLU/analysis/