That was part of his initiation of coverage of the U.S. airline industry with an “attractive” designation.
“We are bullish on the timeline of recovery in airline traffic which underpins our attractive industry view and drives significant upside to our average price target,” Shanker wrote.
JetBlue recently traded at $12.58, up 3.71%. The stock has dropped 33% so far this year.
Passengers will return first to airlines with heavy exposure to domestic leisure travel, return to medium-distance flights and to airlines with strong customer loyalty programs and/or bargain fares, he said.
Shanker anticipates a “relatively quick rebound in traffic,” with demand, as measured by revenue passenger miles, “returning to pre-Covid levels on a run-rate basis by late 2021-early 2022,” compared to the consensus estimate of 2023-2024.
Shanker gave the following stocks overweight ratings: Southwest Airlines (LUV) - Get Report, JetBlue, Delta Air Lines (DAL) - Get Report and Allegiant Travel (ALGT) - Get Report. He rated Alaska Air Group (ALK) - Get Report equal weight and United Airlines (UAL) - Get Report underweight.
He called his ratings a "barbell approach," with a bias toward low-cost carriers.
JetBlue had a tough second quarter amid the coronavirus pandemic. Its revenue tumbled 90% in the period to $215 million from $2.105 billion in the year-ago quarter.
The company posted a loss of $320 million, or $1.18 a share, in the latest quarter, down sharply from $179 million, or 59 cents a share, last year.