Why Is Credit Suisse Upgrading JetBlue?

In a report published Thursday, analysts at Credit Suisse upgraded

from Neutral to Outperform. The price target has been raised from $21 to $27. According to Credit Suisse, the company's outperformance so far in 2015 seems sustainable, while its recent investments have been driving improved returns. JetBlue's core network has also been outperforming, so much so that the company has hiked fares in March. Despite the outperformance year-to-date, "JBLU's PRASM outperformance in H1'15, multi-year margin expansion potential, and balance sheet improvement remain compelling," the analysts said. In addition, the analysts expect the Fare Options rollout in Q2, along with seat densification and the performance of the affinity card to benefit the company in 2016 and beyond. The analysts also expect the pricing for Mint to continue to rise. Credit Suisse has lowered its EPS estimates for the company for 2015 while raising their estimates for 2016. The attractive stock valuation and improving margins are likely to create shareholder value.