JetBlue stock rises on upgrade to Neutral from JPMorgan

Shares of JetBlue Airways (JBLU) are moving higher on Thursday morning as the company's stock received an upgrade from JPMorgan from Underweight to Neutral. The analyst behind the call cites an improved market sentiment and optimism over the future performance of the airline operator.

Yahoo Finance Anchors Brad Smith and Seana Smith break down the latest development for JetBlue and what it could mean for the company moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino

Video transcript

BRAD SMITH: Let's go to the skies. Another stock that we're watching today, JetBlue. Shares of JBLU, they're up 2%. Well, actually, they were up 2%. Now they're up 5%. Great news for them. JPMorgan ditched its underweight rating on the stock to neutral.

Now, analysts at JPMorgan are improving the 2025 earnings forecast on the airline, saying JetBlue is well positioned for a modest potential move to the upside based on improving market sentiment. And there, again, we are seeing shares move higher right now off of this news by about 5.25%. They said they believe JetBlue's second-quarter guide coming next week may exceed that of consensus and they're maintaining their street high, particularly here. Second least-liked airline, they mentioned though as well, based on some of these sell side ratings out there.

SEANA SMITH: Yeah, and they also couched this with the fact that they do see better risk reward elsewhere within the sector. But they are positive on JetBlue for a number of factors just in terms of when you compare it to maybe some of the other factors that we're seeing play out within the sector. They're saying that while JetBlue's margins they do continue to see those trailing those of the big three, that limited his enthusiasm just a bit.

But some of the factors though as to why he is a bit bullish, he talked about the company's New York real estate and management. He thinks that that could actually, quote, "Yield a more turnaround momentum than elsewhere in the beleaguered domestic space." So the price target set at $7 bucks a share after being previously withdrawn here. Adding to some of that positive sentiment that we're seeing, this move higher on the stock now trading just above that level at $7.17.

But, again, this move higher here, the fact that JP Morgan at least no longer saying, "Sell JetBlue." They're now neutral. They went from underweight to neutral on the name, saying that they do think, like you said, it really goes back to what we're going to hear next week on that earnings call on the guidance and the fact that, hey, maybe they are going to surprise to the upside there.

BRAD SMITH: And it's a competitive landscape analysis, too. They expect to be underwhelmed by Southwest's pending turnaround announcement here. They also mentioned new management at JetBlue at the helm, potentially ending what they would characterize as a high tolerance for lost production under the previous CEO.