Cowen On JetBlue Airways And Its Top Picks

Cowen commented on JetBlue Airways Corporation JBLU Thursday and maintained a Market Perform rating and $18 price target.

Analysts led by Helane Becker noted that "JetBlue lowered their capacity 1Q15 guidance as a result of winter storms impacting operations in New York City and Boston. Management now forecasts 1Q15 capacity to increase 9 percent to 10 percent, down from prior guidance of 11 percent to 13 percent."

As a result of storm cancellations, capacity growth was reduced and "PRASM will be greater than prior expectations," according to the analyst note.

Becker also mentioned that the company forecasted Q1 PRASM to be up 3-4 percent with March PRASM growth to increase 4.5 percent, however, March 2014 PRASM declined 8 percent "so the comp is very easy."

The company did not provide an update on costs. Becker assumed the company's Q1 2015 non-fuel unit costs would be down 0.3 percent, compared to management's current guidance of down 1.5 percent to down 3.5 percent.

Becker also increased the firm's underlying jet fuel per gallon assumption for Q1 2015 to $2.03/gallon, compared to the current guidance of $1.97/gallon.

The firm raised Q1 2015 estimated EPS from $0.33 to $0.37 versus the consensus estimate of $0.35.

For 2015, the estimated EPS was raised from $1.55 to $1.60 versus the consensus estimate of $1.63.

For 2016, the firm raised its EPS forecast from $1.55 to $1.60 versus the consensus estimate of $1.76.

The firm's "top picks" were United Continental Holdings Inc UAL, Southwest Airlines Co LUV and Delta Air Lines, Inc. DAL.

JetBlue Airways Corporation recently traded at $17.94, up 4.67 percent.