JetBlue stock receives upgrade from Deutsche Bank
JetBlue (JBLU) stock was upgraded to Buy from Hold by Deutsche Bank, which also raised its price target on the airline’s shares to $9. This comes after activist investor Carl Icahn reached a deal to appoint two directors to JetBlue's board.
Yahoo Finance's Seana Smith and Brad Smith breaks down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
SEANA SMITH: All right. Well, let's take a look at another trending ticker here this morning. It's a name that we've talked about a lot over the past week and that is-- or past several weeks, I should say. That is JetBlue. Ticking higher in pre-market trading after the stock got an upgrade to buy from hold at Deutsche Bank.
More than doubling their price target. They raising it here to $9 a share. Now this upgrade of course coming on some of the developments that we saw last week with Carl Icahn, the activist investor there, unveiling that 10% stake in the airline. Also winning those two board seats. Icahn making the argument that he still thinks that shares are very undervalued given the underperformance that we've seen of the stock over the last year or so, the past few years here.
So Deutsche Bank jumping on board with a more optimistic outlook. Saying that they expect a more moderate domestic available seat mile growth here for 2024 and that's going to have positive implications for their domestic unit here down the line.
BRAD SMITH: Yeah, absolutely. I mean, you think back to what conversations we've had with even our good friend Steve Trent over at Citi, who's been able to chime in on this deal. And really just the probability of the appeal here is largely in question. And I think that spells out more, kind of, doom and gloom for Spirit Airlines, but for JetBlue as well here, a company that's already had the NEA, that Northeastern alliance, essentially broken up,. That they had with American Airlines.
So that's completely jettisoned them into a different type of realm where they need to succeed on their own. And so the US judge that's already looked at this deal blocked the. Merger Now for JetBlue, it's a larger question of as a ultra low cost carrier in an environment where consumers are continuously gravitating toward some of the more premium tiers and premium options and not looking to be nickel and dimed, where does JetBlue kind of make its play or make their value proposition to that customer? Especially as you have this rebound in corporate travel taking place right now, too.
