Raymond James downgrades JetBlue, flags Chapter 11 path
Raymond James analysts Savanthi Syth and Carter Eades downgraded JetBlue to underperform from market perform, citing limited upside due to the $6.12 conversion price of its convertible debt. And while there aren’t liquidity concerns at JetBlue this year, the analysts said it would be prudent for the company to address its capital structure with a Chapter 11 restructuring, calling it a “bitter pill” for current shareholders. The analysts wrote that a restructuring would be smart given the actions management has taken in recent years, including the recent build out of Fort Lauderdale as the company’s first true hub.
Castlelake’s easyJet bid gets board backing, analyst support
Castlelake’s latest £6.90-a-share proposal has a high likelihood of succeeding, Davy Research analysts said in a research note. The board’s recommendation was not unexpected given the airline’s share price performance in recent years, the analysts wrote, calling the proposed acquisition a major event for the European aviation sector given easyJet’s roughly 10% share of the intra-European market.
Interactive Investor’s Victoria Scholar said taking easyJet private could give management greater flexibility by reducing the pressure of public markets and quarterly reporting. Scholar noted that Castlelake’s experience in aircraft leasing and airline investments, together with easyJet’s valuable landing slots at major airports such as London Gatwick, makes the acquisition strategically attractive. The analyst said the bidder is seeking to capitalize on recent weakness in the aviation sector, with easyJet’s shares pressured by higher fuel costs, geopolitical disruption and weaker performance than some rivals. She cautioned that regulatory approvals, particularly European Union ownership requirements, remain a key hurdle before any deal can be completed.
Wealth Club’s Susannah Streeter said the pending sale reinforces concerns around London’s “shrinking role as a home for publicly traded businesses.” International investors are wagering that London-listed stocks trade at a discount, underlining the valuation gap between U.K. stocks and their international peers, Streeter wrote. “The loss of another established public company would be another blow to the depth and diversity of the U.K. stock market,” she added.
Bank of America Securities analysts said Ferrari could report a solid second quarter with an EBIT margin of 30.5%, versus consensus at 30.6% and compared with 29.7% in the first quarter. The bank expects support from a stronger product mix and slightly higher average selling prices. Volumes should be slightly down, as the 296 GTB phases out and the 849 Testarossa and Amalfi are only starting to phase in. “We expect a modest FY26 guidance raise, likely on revenues and possibly on EBIT margin,” the analysts wrote, noting that the company has announced a new limited edition 12Cilindri Manuale. BofA raised its price objective on the stock to €400 from €350 and kept its buy rating.
J.P. Morgan analysts said Air France-KLM is among the European airlines with the greatest potential to outperform estimates this quarter, with results expected to be supported by stronger-than-forecast revenue trends and continued strength in international travel demand. Strong pricing across the airline’s long-haul network, driven by resilient premium demand and constrained industry capacity, should largely offset higher fuel costs, the analysts said. Lower jet fuel prices are also expected to improve profitability. The analysts separately said IAG, the owner of British Airways, is expected to post second-quarter results slightly above consensus estimates, with resilient passenger demand and strong pricing on long-haul routes including the North Atlantic, Latin America and Asia offsetting cost pressures.
Morgans analyst Chris Creech initiated coverage of Qantas Airways with an accumulate rating, seeing fleet investment supporting multiyear earnings growth. The Australian carrier’s next fiscal year looks to be one of transition as the one-off costs of introducing new aircraft continue to move through the business, Creech said. With post-Covid balance-sheet strengthening and cost discipline helping Qantas absorb this year’s spike in fuel costs and consumer softness, Creech sees potential for upward revisions to his conservative forecasts.
In the maritime sector, Deutsche Bank said TKMS’s growth visibility has increased after Canada chose the German ship and submarine builder as the preferred supplier for 12 conventional submarines. The likely order means TKMS has converted all its outstanding major multi-billion contract opportunities, the bank said. Recent order wins could take the company’s order backlog to around €40 billion from €20 billion, giving TKMS growth visibility that differentiates it from peers, Deutsche Bank said.