Low-fare airline

JetBlue

(JBLU) - Get Report

has been soaring since its initial public offering last month, but Tuesday the company's underwriters weighed in with investment ratings that were less than enthusiastic.

One of the members of the IPO's underwriting group, UBS Warburg, started JetBlue with a reduce rating, saying the stock appears to be overvalued. On JetBlue's first day of trading, April 12, the stock jumped 67% from the $27 offering price to close at $45.

Shares of JetBlue have traded as high as $55.15 since it went public, but the lukewarm coverage had the stock in a tailspin.

Lately, the issue was down 9% to $49.50.

UBS wasn't completely down on the stock, saying the company has costs that are well below the industry average and that JetBlue's operating margin in the first quarter was the best in the airline sector.

Cloudy Forecast

Still, the concerns UBS raised about the stock's valuation seemed to be what investors were focusing on. Two other underwriters offered more positive takes on JetBlue. Morgan Stanley started coverage of the company with an equal-weight rating, saying the shares "appear fairly valued based on our 2003 earnings outlook, but we believe above-average growth could spur a premium valuation over time."

Meanwhile, Merrill Lynch had the most optimistic view, starting JetBlue with a medium-term buy rating and saying it expects strong financial growth from the airline. Raymond James also had a significant role in carrier's IPO but hasn't yet offered an opinion on the stock.

The initial coverage isn't notable only for focusing on the year's hottest new issue, but because the research comes at a time when Wall Street is under intense scrutiny from various government agencies and regulatory bodies, including the New York state attorney general's office and the

Securities and Exchange Commission

. The variety of the views JetBlue's underwriters offered should come as a welcome sight to the observers who worry that analysts tend to speak with a uniform, overly bullish voice about the stocks they cover as part of a ploy to drum up investment banking business for their firms.

JetBlue and

Southwest

(LUV) - Get Report

were the only airlines of any size to turn a profit in the first quarter. The major carriers, including

UAL

(UAL) - Get Report

, the parent company of United Airlines, and

AMR

(AMR)

, the holding company for American Airlines and TWA, posted steep losses in the wake of the Sept. 11 terrorist attacks, which exacerbated the industry's pre-existing problems stemming from high fuel prices and labor troubles.