Investing.com -- On Thursday, Raymond James lowered its rating for JetBlue to Market Perform, citing a more balanced risk/reward outlook after a sharp rally in the stock.

The downgrade comes just weeks after the firm issued a tactical upgrade in April.

“We are downgrading JetBlue to Market Perform on more balanced risk-reward, with the shares having reached our $5.00 target price,” analysts wrote.

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They noted that since the upgrade, JetBlue has become “the third best performing scheduled service U.S. airline in our coverage.”

Raymond James said its estimates for the airline remain unchanged since its April 29 post-earnings report.

However, they acknowledged that “improvements in the global trade landscape have likely ameliorated aleatory pressures on both JetBlue and the broader U.S. airline group.”

The firm still sees potential positive catalysts for the airline, including “Spirit-related industry capacity consolidation,” improvement in grounded fleet issues tied to GTF engines, and “the rumored United partnership.”

But, the analysts added that “some improvement [was] already realized in 1Q25,” suggesting much of the upside may already be priced in.

Despite the downgrade, Raymond James expressed confidence in JetBlue’s ability to weather future turbulence.

“Importantly, should there be a meaningful market/economic downturn, we still believe JetBlue is a survivor and don’t see liquidity risk,” the analysts wrote.

JetBlue shares have climbed from recent lows, reflecting improving investor sentiment and renewed optimism over the company’s operational recovery and strategic opportunities.

Even so, Raymond James believes the rally has now brought the stock closer to fair value.

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