The firm said it raised its rating on the airliner based on its belief that the company's revenue and costs should continue to trend positively.
"The U.S. airline industry has evolved. The market's approach to valuation has not, and we believe a dialogue on this topic is overdue," Morgan Stanley said in an analyst note.
"Starting today, we are introducing discounted cash flow as a corroborating framework to our multiple-based price target methodology. Our DCF analysis supports equity upside across the board, though United Airlines (UAL) and JetBlue emerge as significant positive outliers to our current targets," the firm continued.
JPMorgan has a $28 price target on JetBlue stock.
Shares of JetBlue are up by 0.93% to $21.78 at the start of trading on Tuesday morning.
Separately, TheStreet Ratings team rates JETBLUE AIRWAYS CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate JETBLUE AIRWAYS CORP (JBLU) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."