UBS starts JetBlue with Sell on ‘unique headwinds’

UBS initiated coverage of JetBlue Airways with a Sell rating and $5 price target. The analyst sees the company’ pre-tax losses, negative free cash flow and high leverage persisting into 2025. While JetBlue should benefit from an improving domestic revenue per available seat mile and moderation in cost pressures in 2025, it also has “unique headwinds,” such as material exposure to GTF engines and a pilot contract which becomes amendable again in the first half of 2025, the analyst tells investors in a research note. UBS does not believe these risks are accounted for in the stock’s valuation. As current levels, the firm sees a “1:2 downside skew.”