By Kit Norton
Airline stocks were grounded Thursday on the prospect of higher jet fuel prices for a longer period of time after President Donald Trump's speech failed to match Wall Street's recent optimism for a swift end to the war in Iran.
United Airlines and Southwest Airlines were among the worst-performing stocks in the S&P 500, sinking 3.4% and 2.5%, respectively. For comparison, the S&P 500 was flat after being down much more earlier in the session.
Delta Air Lines also dropped 2%, while JetBlue Airways dove 1.7%. American Airlines shares dropped 3.5.
The U.S. Global JETS exchange-traded fund declined 1.7%.
TD Cowen analyst Tom Fitzgerald on Thursday reduced price targets on a few airline stocks. They are skeptical of the resiliency of travel demand given the likelihood of a prolonged period of higher energy prices and decelerating credit card data, the analyst wrote.
TD Cowen cut its price target on United Airlines to $120 from $140, but kept a Buy rating on shares. The analyst also views Delta as the most defensive in the current environment, but see United as the most attractive over the long term.
"We lower our estimates for the big 6 U.S. airlines with fuel looking likely to remain elevated vs. antebellum prices for the remainder of 2026," Fitzgerald wrote.
The analyst added that "further volatility" could create "attractive buying opportunities" for United Airlines stock.
Fitzgerald also wrote that airlines "with higher leverage levels and/or greater fuel sensitivity" are likely "to be more challenged near term." TD Cowen includes American Airlines, JetBlue, and Alaska Air Group in its list of airlines that will be hit hardest by jet fuel prices.
Airline stocks have broadly suffered from a spike in jet fuel prices during the Iran war. Higher jet fuel prices mean it is incredibly difficult for airlines to generate profits, according to analysts.
Jet fuel prices have surged around 70% since the start of the U.S. and Israel-led war with Iran. Trump on Wednesday said that the war with Iran is "nearing completion" but that "we must honor the dead by completing the mission." Overall, Wall Street's consensus view after Trump's remarks was that the war may drag on longer than previously hoped.
When it comes to airlines, this means jet fuel prices could remain elevated for longer. The U.S. Gulf Coast Kerosene-Type Jet Fuel Spot price hit a recent peak of $4.344 per gallon on March 20, its highest level since May 2, 2022. That compares to $2.428 per gallon on Feb. 27, just before the war with Iran began.
Write to Kit Norton at kit.norton@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 02, 2026 11:37 ET (15:37 GMT)
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