Premarket Movers: JetBlue Takes Off
Tuesday June 20, 9:22 am ET
Analyst Sees JetBlue As Turnaround Story, Sees Jump in Revenue This Summer
NEW YORK (AP) -- JetBlue Airways Corp. shares rose ahead of the opening bell Tuesday after Morgan Stanley called the discount airline a turnaround story, and said to expect revenue trends to surprise on the positive side this summer.
The brokerage restarted coverage of JetBlue with an "Overweight" rating. In addition, Continental Airlines Inc. and American Airlines' parent AMR Corp. were given an "Equal Weight," while Southwest Airlines Co. was given an "Underweight" rating.
William Greene, an analyst with Morgan Stanley, said JetBlue remains his "top airlines pick" in a report that put the airline sector as a whole at an "In-Line" rating. He said the "former industry darling is now a turnaround story" and that a "new focus on efficiency is leading a push to reduce costs in 2006."
Shares of the New York-based company rose 43 cents, or 3.7 percent, to $11.96 in premarket trading on the INET electronic exchange, after closing Monday at $11.53 on the Nasdaq. AMR edged up 11 cents to $24.62 on INET from its New York Stock Exchange close at $24.51, while Continental added 34 cents, to $27.24 on INET from their NYSE close at $26.90.
Apple Computer Inc. shares failed to bounce as speculation ramped up the company is in advanced talks with Hollywood studios toward a deal to bring feature film downloads to the iTunes Music Store. Sticking points are seen over pricing, and there are reports that studio executives have balked at a flat-rate model.
The Cupertino, Calif.-based company's shares rose 38 cents to $57.58 after closing Monday at $57.20 on the Nasdaq.
Retailer Costco Wholesale Corp. shares moved higher before the bell after JPMorgan upped its rating to "Overweight" from "Neutral." Analyst Charles Grom said he had an "upbeat call" with the company, and believes the wholesaler is poised for higher margins and a stronger cash position.
"With the stock off roughly 8.1 percent from its 52-week high in early April, we want to own Costco before several positive catalysts begin to emerge in the second half," Grom said in the report.
He listed continued mid-to-high single earnings comparisons from year-ago results, margin expansion and "potential gasoline mix tailwinds by mid-Summer. Shares of the Issaquah, Wash.-based company rose $1.04 to $54.59 after closing Monday at $53.55 on the Nasdaq.
MasterCard Inc. shares moved higher after the company reported Monday that it scored a victory over a challenge to interchange fees in Europe. An industry appeals tribunal set aside a ruling by the U.K.'s competition watchdog that the fees impose on retail merchants by MasterCard violated European Union and British law.
Shares of the Purchase, N.Y.-based company rose 58 cents to $44.92 after closing at $44.34 on the NYSE.