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Read Why Goldman Sachs Is Bearish On Some Airline Stocks Short-Term

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·2 min read
In this article:
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  • Goldman Sachs analyst Catherine O'Brien downgraded JetBlue Airways, American Airlines and lowered the Price Target for Allegiant Travel and Spirit Airlines.

  • O'Brien remains positive on the path to profitability recovery for the airlines over the medium-term but reduced December quarter and 2022 outlooks as she mark-to-markets for fuel and a worse short-term revenue environment than previously expected.

  • The analyst downgraded JetBlue Airways Corp (NASDAQ: JBLU) to Neutral from Buy and lowered the price target to (implying an upside of 10%) from $20.

  • O'Brien expects JetBlue's costs to continue its codeshare partnership with American will outstrip revenue driven by the alliance over the medium-term, especially given the pricing pressure she expects to see across the industry due to elevated capacity and corporate/international demand "that will likely still be in recovery."

  • The analyst downgraded American Airlines Group Inc (NASDAQ: AAL) to Sell from Neutral and lowered the price target to (implying a downside of 13%) from $19.

  • O'Brien expects American shares to underperform, saying its "relatively higher" operating leverage will weigh on its profitability recovery in a weaker industry pricing environment over the medium term.

  • The analyst lowered Allegiant Travel Co's (NASDAQ: ALGT) price target to 5 (implying an upside of 36%) from $278 and maintained a Neutral rating on the shares.

  • The analyst lowered Spirit Airlines Inc's (NYSE: SAVE) price target to (implying an upside of 7%) from $35 and maintained a Neutral rating.

  • Price Action: JBLU shares are trading lower by 4.62% at $15.39, AAL lower by 4.3% at $20.54, ALGT lower by 3.59% at $193.8, and SAVE lower by 4.08% at $25.9 on the last check Wednesday.

Latest Ratings for JBLU

Oct 2021

Goldman Sachs

Downgrades

Buy

Neutral

Sep 2021

Morgan Stanley

Maintains

Overweight

Jul 2021

Raymond James

Maintains

Outperform

View More Analyst Ratings for JBLU
View the Latest Analyst Ratings

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