Analysts See U.S. Airline Stock Turnaround. JetBlue, American Report This Week.

• Alaska Air Group received a $77 price target from UBS (50%+ upside potential) based on strong 2026 guidance showing Q1 corporate bookings up 20% year-over-year, despite missing Q4 revenue expectations by $10 million
• Southwest Airlines outperformed peers with 30% stock gains over 12 months, while Alaska fell 26% and JetBlue dropped 33% in the same period, though most carriers rebounded 12-15% in the last six months
• JetBlue and American Airlines report Tuesday with analysts expecting JetBlue losses of $1.61 per share for 2025 and American showing minimal 1% revenue growth, while Southwest reports Thursday with more positive forecasts

Market Summary: U.S. Airline Sector Shows Signs of Recovery

Key Developments:

Alaska Air Group reported Q4 revenue of $14.239 billion, slightly below analyst expectations of $14.249 billion. Despite the miss, four analysts raised price targets post-earnings, with UBS maintaining its bullish $77 target—representing 50%+ upside potential. UBS analysts cited strong Q1 momentum, with corporate bookings up 20% year-over-year.

2026 Guidance:

Alaska Air Group forecasted 2026 EPS between $6.50-$8.50. The wide range reflects macroeconomic uncertainties including fuel prices, consumer sentiment, and potential tariff impacts. Analysts noted that a 10-cent-per-gallon fuel price change translates to $0.75 in EPS impact.

Upcoming Earnings:

• Tuesday: JetBlue (JBLU) and American Airlines (AAL) report
• Thursday: Southwest Airlines (LUV) reports

Analyst Expectations:

• JetBlue: FY2025 loss of $1.61/share
• American Airlines: Revenue growth under 1% for 2025
• Southwest: Positioned most favorably among peers

Stock Performance:

Over the past 12 months:

• Southwest: +30% (outperformer)
• Alaska: -26%
• JetBlue: -33%
• American: -14%

However, six-month trends show recovery: American and JetBlue both up ~15%, Southwest +12%, though Alaska remains down 6%.

Market Implications:

Investors remain cautious after 2025 disappointments but are watching for sustained recovery momentum. This week's earnings will be critical in determining whether U.S. airlines can match their international counterparts' performance and maintain their recent stock rebounds.