Citi's analyst John Godyn expressed concerns that JetBlue's focus on leisure travel may lead to underperformance in Revenue per Available Seat Mile (RASM) as macroeconomic factors, including rising inflation, could reduce demand. The bank lowered its price target for JetBlue shares from $6.60 to $5.30, indicating a potential 14% decline from the stock's recent closing price.
Despite a 36% increase in JetBlue's shares year-to-date due to a new profit-driven strategy, Citi believes the risk-reward profile has turned negative, especially with the diminishing prospects of consolidation with other airlines.
Currently, JetBlue trades at approximately 6.2 times price-to-earnings, aligning with its peers, suggesting that much of its earnings potential is already reflected in the stock price. This downgrade contrasts with the broader market sentiment, as 12 out of 19 analysts still maintain a hold rating on JetBlue