Virgin America upgraded to neutral as J.P. Morgan sees 'meager' regulatory hurdles

Virgin America Inc. was upgraded to neutral from underperform at J.P. Morgan after the analysts said the approval of the merger with Alaska Air appears to be "more likely than not." The analysts say the deal appears to have "meager" regulatory hurdles and that there don't appear to be any troublesome markets, but still cautioned that the Department of Justice appears to have some concerns. "Never go in against a Sicilian when death is on the line, and never assume the DOJ rubber stamps an airline merger," they wrote. The analysts said they don't understand what problems the DOJ is finding in the merger, which suggests that "atypical solutions may be required." The analysts have a weighted average fair value of $52.50 for the stock. Shares of Virgin America have lost 7% in the past three months, compared to the S&P 500's gain of 1.2%.

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