JetBlue Airways Corp (NASDAQ:JBLU) and Spirit Airlines Inc (NYSE:SAVE) shares have been trading lower since the proposed Spirit-JetBlue merger hit a roadblock Tuesday. A U.S. District Court judge blocked the acquisition of Spirit Airlines by JetBlue, saying that the deal would raise the cost of airfare and reduce the number of flights available.
JetBlue stock was down 7.5% and Spirit Airlines stock 22.29% during the first two hours of trading Thursday.
What JetBlue, Spirit Analysts Have To Say
Ratings and price targets for JetBlue Airways stock remained unchanged by Susquehanna Financial Group analyst Christopher N. Stathoulopoulos who reviewed the stock.
BofA Securities analyst Andrew G. Didora changed his rating from No Rating to Underperform. Didora had a price target of $5 on Spirit Airlines stock.
Susquehanna’s Stathoulopoulos also issued a downgrade for the stock from Neutral to Negative. The analyst drastically reduced the price target on Spirit Airlines stock from $15 to $5.
The Spirit Airlines Thesis:
BofA Securities’ Didora said Spirit Airlines has a difficult path ahead to return to its historical level of growth and profitability. This is further exacerbated by approaching debt maturities. Fundamentals are further pressured by a tough domestic capacity environment and GTF engine repairs. These inhibit growth and cost plans, hurting Spirit’s traditional ultra-low-cost business model, he saiud.
Susquehanna’s Stathoulopoulos said Spirit Airlines, on a standalone basis, is facing significant headwinds through at least 2024.
The Spirit-JetBlue Merger’s Future?
Susquehanna’s Stathoulopoulos sees little likelihood of JetBlue reworking the deal. And with this development, Spirit Airlines’ fundamental challenges come into sharper focus. Any other potential bidder will now have to contemplate what was a lengthy and arduous regulatory review as well as a challenging operating landscape for U.S. carriers into 2024, he said.
Will JetBlue appeal the ruling or restructure the deal?
Susquehanna Financial Group views either of these situations unlikely, as:
JetBlue CEO Robin Hayes is stepping down next month due to health concerns.
Investor…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
