Analyst Jamie Baker of JPMorgan trimmed estimates for several U.S. airlines for the second quarter.

Delta Air Lines Inc (DAL  )

  • Rating: Overweight
  • Price Target: $83
Delta remains the "industry leader among full-service airlines," Baker wrote in the note. Before COVID-19, the company generated the highest margins among peers, which was "at least partly structural," and its balance sheet allowed it to be under less strain than others during the pandemic downturn, he stated.

After COVID-19, Delta witnessed "industry-leading loyalty economics, international travel tailwinds and robust premium product demand, trends we think will continue for the foreseeable future," the analyst said.

American Airlines Group Inc (AAL  )

  • Rating: Overweight
  • Price Target: $26
While American Airlines' balance sheet issues remain, "execution on deleveraging has effectively removed significant overhang, with the lowest capital spend of DAL and UAL in the near term providing runway for further improvement," Baker wrote.

American Airlines stands to benefit from the demand recovery being led by international travel, which continues to accelerate more than domestic, he added.

JetBlue Airways Corp. (JBLU  )

  • Rating: Neutral
  • Price Target: $6
JetBlue has the ability to move past its failed acquisition of Spirit Airlines and "recapture lost margin ground on Legacy carriers," the analyst stated.

"JBLU possesses all the tailwinds currently benefitting the sector: premium product, meaningful loyalty, and international travel, albeit all to a significantly lesser degree than the Big 3 of DAL, UAL and AAL," he further wrote.

Southwest Airlines Co (LUV  )

  • Rating: Underweight
  • Price Target: $30
Southwest Airlines has "the industry's deepest track record of profitability, the highest quality balance sheet, and a loyal customer base," Baker said.

He added that the company faces operational issues and carriers with premium and international exposure should outperform Southwest Airlines in the near term.

United Airlines Holdings Inc (UAL  )

  • Rating: Overweight
  • Price Target: $133
United Airlines "possesses exposure to the strongest industry tailwinds, primarily robust demand for international travel and premium products," the analyst wrote.

"With Legacy airlines widening the outperformance gap over LCCs (low-cost carriers), we expect trends to continue to favor the Big 3 (DAL, UAL, AAL) in the medium term," he further stated.

Price Action: At the time of publication on Monday:

  • Delta Air Lines shares declined by 0.16% to $37.19.
  • American Airlines rose by 1.56% to $9.61.
  • JetBlue Airways rose by 2.92% to $4.06.
  • Southwest Airlines declined by 1.74% to $25.42.
  • United Airlines Holdings rose by 0.31% to $58.01.