(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Airlines and a major industrial company were in focus among early analyst calls Tuesday. Bernstein raised its rating on Southwest Airlines on strong demand, while Deutsche Bank upgraded JetBlue on an improving backdrop for domestic U.S. travel. On a more sour note, Evercore ISI advised clients take profits in Caterpillar, downgrading the stock. Check out the latest calls and chatter below. All times ET. 5:45 a.m.: Deutsche Bank upgrades JetBlue as domestic airline backdrop improves More balanced domestic supply should spell good things for JetBlue, according to Deutsche Bank. Analyst Michael Linenberg upgraded the airline to buy from hold. He also more than doubled his target price to $9 from $4, implying that JetBlue stock could rally 29% from its Friday closing price. “We believe more moderate domestic ASM (available seat mile) growth for 2024 will have positive implications for domestic unit revenue performance, and by extension, should translate into solid top-line performance for the domestic-focused names,” the analyst wrote. Specifically, an idiosyncratic catalyst for JetBlue is the company’s near-term commitment to restoring its profitability. Although JetBlue’s blocked merger with Spirit Airlines is an obstacle, Linenberg believes the airline can still utilize other methods to grow its network. “We don’t see any impediments to JetBlue seeking alternative means to expand its network and increase market relevance and ubiquity (assuming that the Spirit merger is no longer an option) via asset-light approaches such as code shares, alliances, and/ or international joint ventures, all of which can be highly accretive to [return on invested capital] and [earnings per share],” he wrote. — Lisa Kailai Han 5:38 a.m.: Southwest Airlines receives a tepid upgrade from Bernstein Near-term demand is strong enough to outweigh the headwinds for Southwest Airlines , according to Bernstein. The investment firm upgraded the airline stock to market-perform from underperform, boosting its price target to $32 from $26. To be sure, that forecast points to a more than 5% slide from Friday’s close. Southwest has rallied 17.5% this year. Analyst David Vernon listed a stronger domestic market as a reason for the rating boost. While costs have remained elevated, demand is robust enough to balance them out. “The rejection of the JetBlue-Spirit deal and equipment availability issues at Spirit, a pivot by Frontier to shift capacity out of competitive markets, and slowing deliveries of Boeing Max aircraft has resulted in a more moderate capacity forecast than we had been expecting,” he wrote. “At the same time, travel demand remains resilient. The combination of these factors has the market believing unit revenue forecasts are too low and will be sufficient to drive positive revisions.” The analyst added that while the airline will find it difficult to raise returns on capital back to where they were before the pandemic, he’s “not as convinced the market will care near term.” Still, he cautioned that Southwest’s lofty valuation makes it especially sensitive to any potential sentiment shift within domestic pricing. — Lisa Kailai Han 5:38 a.m.: Evercore ISI downgrades Caterpillar It’s time to book some profits in Caterpillar , according to Evercore ISI. Analyst David Raso downgraded the industrial machinery giant to inline from outperform. His price target of $338 per share implies upside of just 5% from Friday’s close. “Valuations/Expectations Have Gone From ‘Survival’ To Avoiding A Down Year To Now Anticipating Reacceleration 2H24 Through ’25 & , In Many Cases, ’26,” Raso wrote. “Let’s Take Some Profits, Pause and Let EPS, Mgn Assuredness, & Macro Visibility “Grow Into The Stocks”; This Could Be ‘Not Goodbye, But Until We Meet Again.'” Caterpillar shares are off to a strong start for the year, rising 8.8%. Over the past year, the stock is up nearly 30%. CAT 1Y mountain CAT in past 12 months — Fred Imbert
