Raymond James downgrades Frontier to sell on weaker fare trends

Raymond James analyst Savanthi Syth downgraded Frontier Group to Underperform from Market Perform without a price target. The downgrade reflects a slightly lower fuel outlook and weaker fare trends, the analyst tells investors in a research note. The firm says the budget airline setup into Q3 is “clear as mud” given the “rapid market and product modifications and potential headwinds. The risks are greatest at Frontier and Spirit despite the “already weak share price and investor sentiment,” adds Raymond James. The firm says that despite network changes to improve operations, Frontier’s completion factor lags that of most U.S. peers both on an absolute and year-over-year basis. Raymond views the airline’s adjustments to August schedules as a “Band-Aid” to its longer-term concerns around Frontier’s planned growth with 240-seat A321s.