** UBS assumes coverage on U.S. budget airline Frontier Group Holdings ULCC.O with "neutral" rating; raises PT to $4 from $3.50

** ULCC can benefit from its initiatives around premium seating, loyalty programs and cost-cutting plans, brokerage says

** Company faces competitive response from network carriers such as United Airlines UAL.O, which offer robust economic offerings, UBS says

** "The macro backdrop remains uneven and ULCC's customers tend to be more price-sensitive than others" - UBS

** One among 12 brokerages rates the stock "buy" or higher, 10 "hold" and one "sell"; median PT is $4 - data compiled by LSEG

** As of last close, stock down ~44.5% YTD

(Reporting by Prakhar Srivastava in Bengaluru)

((Prakhar.srivastava2@thomsonreuters.com))