Airline stocks dip as Jefferies hands out downgrades to Delta, Southwest, and American
Jefferies is getting more pessimistic about US aviation.
The first quarter already had airline investors reaching for a Dramamine, and analysts don’t seem too optimistic about the second.
Three of the the big four US airlines — Southwest Airlines, American Airlines, and Delta Air Lines — were slapped with downgrades and lowered price targets from Jefferies on Tuesday, sending shares into the red.
With summer travel pressured by lower discretionary and business spending, Southwest and Air Canada were downgraded from “hold” to “underperform,” while American and Delta were downgraded from “buy” to “hold.” Analyst Sheila Kahyaoglu expects Southwest, Air Canada, and American to cut their 2025 guidance and said Delta is likely to follow suit.
United Airlines is now Jefferies’ only airline with a “buy” rating, but the carrier wasn’t entirely spared: Jefferies slashed its price target from $154 to $80.
The big four US airlines have already shed more than $24 billion combined in market cap this year as tariffs ripple across the industry. That softness, Jefferies says, could hit international airlines, too — something we may have started to see with Virgin Atlantic’s warning about US travel on Monday.
