NEW YORK (AP) -- Goldman Sachs recommends that investors get rid of their JetBlue shares on the expectation that air travel demand growth is slowing.
Analyst Tom Kim cut shares of JetBlue Airways Corp. to "Sell" from "Neutral," saying he thinks that air traffic growth will remain muted over the next three to six months.
Kim believes vacation travel trends are weaker than business travel trends, which is risky for JetBlue because leisure travelers are its core customers.
As demand slows, airlines may have to lower airfares, the analyst believes. That could pressure JetBlue's profit.
Kim cut his earnings estimates for the company for the current quarter and for 2013. He cut his price target to $4.50 from $5, indicating a potential decline of 11 percent from Thursday's close.
Also Friday, Sterne Agee analyst Jeffrey Kauffman said the impact of Superstorm Sandy caused him to significantly lower his expectations for the fourth quarter.
JetBlue said Thursday that Superstorm Sandy will cut its fourth-quarter revenue by $40 to $45 million, or about 5 percent. Traffic in October rose just 1 percent from a year earlier, significantly slower than in previous months.
Kauffman also said that JetBlue's plans to expand in Boston, the Caribbean and Latin America might not work out as well as it has hoped given the weak economy and high fuel costs.
Shares of JetBlue lost 9 cents, or 1.7 percent, to $4.95 in late afternoon trading.