MW Here's why Frontier Airlines' stock may have reached the end of its runway for now

By Claudia Assis

Frontier's stock gets a downgrade from analysts at Deutsche Bank

A Frontier Airlines jet at an airport in Orlando, Fla.

Shares of Frontier Airlines parent company Frontier Group Holdings are some of the best -performing airline shares in recent months, defying expectations that the business model of low-cost and ultralow-cost airlines business model was dying.

But that surge led analysts at Deutsche Bank to dial back their expectations for the stock on Tuesday.

Frontier $(ULCC)$ plans to accelerate growth in the first half of the year, and its capacity in the second quarter is expected to be up 14% year over year, the Deutsche Bank analysts said. That is a risky bet, they noted.

"While we see the move as potentially an opportunistic one, we also think Frontier's meaningful increase in supply growth raises the risk profile of the company," the analysts said.

Deutsche Bank cut its rating on Frontier's stock to hold, from buy, and kept its $6 price target, which represents a downside of about 2% over Tuesday's share price.

Frontier could surprise if it reports better 2026 and 2027 earnings thanks to modest capacity growth and an uptick in demand from travelers seeking the lowest air fares, which are the core Frontier customers, the analysts said. A downturn in air-travel demand and fuel-price volatility are key risks to that call, the analysts added.

Frontier's stock is up nearly 55% in the last three months, which compares with gains of about 24% for the U.S. Global JETS ETF JETS in the same period. The stock hasn't been a winner for long - it lost more than 40% in the last 12 months, whereas the ETF gained 20%.

The company has benefited from favorable domestic air-travel trends this year plus capacity cuts by its largest head-to-head competitor, Spirit Airlines $(FLYYQ)$, which overlaps approximately 30% of Frontier's network, the analysts said. Spirit in August filed for its second bankruptcy in a year.

United Airlines $(UAL)$ CEO Scott Kirby last year famously derided the business model of low-cost and ultralow-cost airlines, saying that the model was "dead" and it "screwed the customer."

Legacy airlines such as United have focused on well-heeled customers, offering perks such as priority boarding and loyalty programs.

Don't miss: Rich fliers are making United and Delta billions by buying premium perks

Budget airlines' low fares appeal to travelers with more limited income, and those travelers are more acutely feeling the rising cost of living and thus may have less disposable income for air travel.

The budget airlines also face increasing competition from the larger carriers, which have added their own highly restricted, stripped-down "basic economy" fares that are the core proposition of low-cost and ultralow-cost carriers.

-Claudia Assis

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February 10, 2026 12:20 ET (17:20 GMT)

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