Raymond James downgrades Spirit Airlines to sell on weaker fare trends

Raymond James downgraded Spirit Airlines 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 does not believe a bankruptcy filing is a foregone conclusion for Spirit, and says the GTF engine compensation has been good. However, it does not fully offset the earnings impacts from aircraft on ground, which is a materially greater issue for Spirit than any other U.S. airline and expected to get worse in 2025, Raymond adds.