BofA cuts Southwest to Underperform on lack of exposure to strongest trends

As previously reported, BofA downgraded Southwest (LUV) to Underperform from Neutral with a price target of $31, down from $33. Given less exposure to corporate, premium, and international routes, the firm downgraded both Southwest and JetBlue (JBLU), arguing that both airlines trade at the high end of historical valuation ranges despite less exposure to “the strongest industry trends.” Both also are exposed to execution risk as Southwest expands its product offering and JetBlue continues to fine tune its network, the analyst added.