JetBlue shares sank to $17.15 after J.P. Morgan analyst Jamie Brown downgraded the company's stock to "neutral" from "overweight." The analyst also cut back his target price to $18 from $20.
The hit to JetBlue comes as shares of American Airlines Group (AAL) sank more than 8% after it announced that fourth quarter revenue will be at the lower end of expectations.
The J.P. Morgan analyst acknowledged JetBlue's efforts to cut costs.
"We believe the comprehensive review of maintenance programs/fleet, management redundancies, airport expenses, and sales/distribution programs have a credible probability of success," Brown wrote.
But the report calls JetBlue's fuel economy projections "ambitious," while also questioning whether the airline's other cost efficiency efforts would be enough to move JetBlue's share price up in the near term.
One big issue for JetBlue among investors has been JetBlue's "relatively weak track record of cost control," Brown noted.
"We fail to identify sufficient near-term catalysts that we believe could propel shares meaningfully higher," Brown wrote, also noting that several weeks of volatility among airline stocks have also worked to weigh down JetBlue.
Other risks include JetBlue's fierce head-to-head competition with Delta (DAL - Get Report) for customers in the Boston market, with the potential for "near-term oversupply" resulting in "unit revenue headwinds," the J.P. Morgan analyst wrote.