Citi upgrades JetBlue to Neutral as valuation risk eases

Shares of JetBlue Airways (JBLU) rose 3.5% in the premarket trading on Tuesday after Citi upgraded the airline to Neutral from Sell, saying the sharp decline in the stock had improved its risk-reward profile.

The brokerage kept its price target on JetBlue (JBLU) at $4.50, implying about an 11% upside from the stock's last close.

The move was “primarily as a result of the significant decline the stock has experienced,” Citi analyst John Godyn wrote.

JetBlue (JBLU) shares are down 37% from an August peak, while an index of airlines is down 19% from its August high, the note said. Godyn said the declines “have definitionally improved risk/reward across airlines,” although he remains cautious on the sector’s longer-term outlook.

For airline rallies to be sustained, carriers “must offer and commit to appropriately conservative outlooks for 2027 capacity growth rather than just talk up recent demand strength,” the analyst added.

Citi said its upgrade was primarily valuation-driven, while maintaining concerns about JetBlue’s (JBLU) longer-term strategic position and execution of its JetForward turnaround plan.

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