BofA Securities analyst Andrew G. Didora has upgraded JetBlue Airways Corp (JBLU) from Underperform to Neutral, setting a price target of $6. While acknowledging that JetBlue’s balance sheet remains challenged, Didora’s upgrade reflects a positive outlook on the airline’s fundamentals and the favorable industry backdrop.
Didora forecasts a strong liquidity position for JetBlue in the coming years, citing their August debt transaction. He projects a nearly $3.7 billion liquidity position in 2026, almost 90% above 2019 levels, giving the company time to execute its turnaround plan. The analyst’s price target is 6.0x Didora’s 2025E EBITDAR, aligning with JetBlue’s long-term average.
Didora’s valuation methodology shifts from EV/Sales to EV/EBITDAR, reflecting the decelerating losses from 2024-2026 at the net earnings level. This shift is driven by improving business fundamentals and the overall positive outlook.
Recent trends in the airline industry, including stable air travel demand and falling fuel prices, are positive indicators. These tailwinds, coupled with JetBlue’s ongoing self-help measures, including the JetForward plan, provide further support for the airline’s positive outlook.
JetBlue recently provided a positive investor update, highlighting improving revenue trends, particularly in Latin America. The airline is benefiting from ongoing revenue initiatives driven by the JetForward plan.
Didora forecasts fiscal third-quarter and fiscal 2024 unit revenues of +4.2% and +0.5%, respectively, exceeding his previous projections. He also raised his third-quarter, fiscal 2024, and fiscal 2025 EPS estimates.
JetBlue’s stock is currently trading at $5.77, reflecting an 8.77% increase on Monday.
