UBS initiated coverage on JetBlue Airways Corporation (NASDAQ:JBLU) with a Sell rating and a $3 price target, warning that despite potential Q2 outperformance, the airline faces significant challenges sustaining momentum into the second half of 2025 and beyond.
The analysts acknowledged that JetBlue’s conservative Q2 guidance could set the stage for a slight beat, with revenue declines modeled at -6.0% year-over-year versus the consensus of -6.4%. Recent share gains at LaGuardia, boosted by competitive dynamics at Newark, and strong Memorial Day travel trends likely supported results in June. UBS forecasts Q2 EPS of -$0.31, a bit better than the Street’s -$0.34 estimate.
However, the firm flagged persistent headwinds ahead: weak revenue per available seat mile (RASM), elevated costs (CASM-ex estimated to rise 6.5%), and limited near-term catalysts to drive a sustained earnings recovery. UBS projects ongoing quarterly losses through this year, with only modest EBIT-level profitability possible next year—but only if revenue metrics accelerate meaningfully.
Given these hurdles, UBS believes the risk-reward profile skews negative, as a steep ramp in revenue performance would be needed for JetBlue to meet profit targets, a scenario it sees as unlikely under current market conditions.
