JP Morgan Cuts Pinnacle Airlines to Underweight from Neutral
JP Morgan downgraded Pinnacle Airlines (PNCL ) to underweight from neutral, citing the regional airline's relationship with Northwest Airlines.
Pinnacle provides capacity to Northwest Airlines, which last week issued a Request for Proposal for up to 125 regional jets from U.S. regional operators. Analyst Jamie Baker doesn't see the move as an attempt to disenfranchise Pinnacle, but with Pinnacle shares having rallied sharply off recent lows, Baker sees little appeal at current levels as this process plays out. With Pinnacle's economic survival essentially at stake, Baker doubts it will allow itself to be underbid by rival regional operators.