Zacks Investment Research downgraded shares of JetBlue Airways Corporation (JBLU) from OUTPERFORM to NEUTRAL on May 30, 2014, with a target price of $10.00.
We downgrade our recommendation on JetBlue Airways from Outperform to Neutral owing to its weak first-quarter 2014 results. Both the top and the bottom line missed the Zacks Consensus Estimate. Increased price competition from rivals, rising pilot compensation and rise in other operating expenses remain major concerns for JetBlue. However, network expansion, cost control and increased focus on differentiated product offerings is expected to drive the company's performance. We believe the recent slot wins in Reagan Airport in addition to JetBlue's emphasis on expansion in major growth regions like Boston, Fort Lauderdale, the Caribbean and Latin America, will support future growth. Moreover, elimination of certain long haul flights, fleet re-designing, cost-saving moves and lucrative strategic partnerships are expected to create tailwinds for JetBlue going ahead.
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