Bank of America Securities (BofA) outlined a second-quarter 2025 earnings preview for airline companies in an investor note on Tuesday, with a focus on second-half 2025 capacity.

Analyst Andrew Didora notes airline management teams have highlighted stability throughout the second quarter 2025.

BofA adds, “As such, we expect 2Q25 results to be largely in line with outlooks.”

Looking at trends into the third quarter of 2025, Transportation Security Administration (TSA) throughput has been down, while BAC aggregated debit and credit card data for airline spend has been down slightly more in June than in April/May.

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So the analyst does not expect a meaningful sequential improvement in revenue trends.

“We believe investors will be looking for commentary on any green shoots in demand, and any further commentary on 2H25 capacity cuts could be viewed positively,” he added.

Stocks in Focus

For Alaska Air Group Inc. (NYSE:ALK), BofA sees its balance sheet strength and cost focus, with a price forecast of $60.

For Allegiant Travel Company (NASDAQ:ALGT), the analyst says the $50 price target is reasonable given the positive industry backdrop and Allegiant Travel’s monopolistic routes. However, Didora sees heightened cost risks for Allegiant given its recent 737 MAX order and pilot labor costs.

American Airlines Group‘s (NASDAQ:AAL) price forecast of $12 is based on 5.5x 2025E EBITDAR. The analyst says the target multiple is at a half-turn discount to American Airlines’s legacy peers, given higher leverage and execution risk.

For Delta Air Lines Inc. (NYSE:DAL), the BofA analyst believes the network carrier can trade towards the upper end of its historical valuation range (4-6x) over time, given revenue diversification and strong operational execution.

Frontier Group Holdings Inc.’s (NASDAQ:ULCC) price forecast of $4 is based on approximately 6.5x 2026E EBITDAR, adjusted for sale-leaseback gains. This multiple is in line with ultra-low-cost carriers’ historical valuation multiple and ULCC’s multiple since going public in 2021.

JetBlue Airways Corporation’s (NASDAQ:JBLU) price forecast of $3 is based on approximately 0.9x EV/Sales multiple, which is in line with the 0.6-1.0x range that airline stocks traded in more difficult economic times, like those in 2008-2009.

“We believe this is reasonable given JBLU’s meaningfully depressed earnings and high net leverage,” the analyst wrote.

Southwest Airlines Co‘s (NYSE:LUV) price target of $26 is based on approximately 7.0x 2025E EBITDAR. Given positive yield dynamics across the industry, this target multiple is at the high end of LUV’s long-term historical average of 6.2x.

United Airlines Holdings Inc‘s (NASDAQ:UAL) price forecast of $90 is based on approximately 5.5x 2025E EBITDAR.

“Our target multiple is in line with UAL’s legacy peers. We believe the network carriers can trade towards the high end of their historical valuation ranges (4-6x) given depressed earnings,” Didora wrote.

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