J.P. Morgan Securities issued JBLU and SAVE upgrades after President Trump advocated for additional support for airlines
Airline stocks are leading the charge in today's broad market surge. After halting talks between House Democrats and Senate Republicans regarding a national stimulus package, U.S. President Donald Trump backtracked, tweeting in support of providing $25 billion for standalone airline payroll support. In response, J.P. Morgan Securities chimed in with a series of bull notes for the airline sector. Among the lucky recipients of the upgrades and price-target hikes are JetBlue Airways Corporation (NASDAQ:JBLU) and Spirit Airlines Incorporated (NYSE:SAVE).
J.P. Morgan Securities hit JBLU with a double-upgrade, moving the shares to "overweight" from "underweight". Additionally, the firm raised its price target on the stock to $17 from $12 -- territory not charted since right before the pandemic. In response, the stock is up 6.3% to trade at $12.25, although the rally has run out of steam below its 200-day moving average.
Coming into today, analysts were a bit skeptical concerning JetBlue stock; not a surprise considering its still 35% year-to-date deficit today. In fact, nine recommend a "hold" or worse rating.
Switching gears, J.P. Morgan Securities also upgraded Spirit Airlines stock to "neutral" from "underweight" while upping its price target to $19 from $14. SAVE is up 3.1% to trade at $16.24, but remains stuck in a tight consolidation pattern between $15 and $20 for the last five months. In 2020, the shares have taken a 60% haircut.
Analysts were more divided on their stance concerning Spirit Airlines stock coming into today. Of the 12 in coverage, six called it a "strong buy," while the other six recommended a "hold" or worse. Plus, the 12-month consensus price target of $18.36 is an 11.9% premium to current levels, and nearly right in line with J.P. Morgan's recommendation.