On Tuesday, Citi analysts updated their financial outlook for JetBlue Airways (NASDAQ:JBLU), raising the price target to $7.90 from the previous $7.60, while keeping a Neutral rating on the stock. The adjustment reflects the anticipated increase in revenue per available seat mile (RASM), as stated by the Citi analyst. According to InvestingPro data, JetBlue's stock has shown significant momentum with a 53% return over the past year, despite operating with a substantial debt-to-equity ratio of 3.34x.
JetBlue's forecast now includes a stronger expected RASM, which has led to changes in the earnings per share (EPS) estimates. For the fourth quarter of 2024, the EPS projection has been improved from a loss of $0.39 to a loss of $0.33. Additionally, the full-year EPS estimates for JetBlue have been revised.
The forecast for 2024 has been updated from a loss of $0.89 to a loss of $0.84, for 2025 from a loss of $0.50 to a loss of $0.47, and the 2026 projection remains unchanged at a gain of $0.06.
InvestingPro analysis reveals that 7 analysts have recently revised their earnings expectations upward, though the company faces challenges with rapid cash burn and significant debt servicing concerns.
The analyst's decision to raise the price target is based on applying an 8.125x multiple to a slightly higher projected EBITDA for 2025. This calculation has nudged the target price for JetBlue's stock upward by $0.30.
JetBlue, a New York-based hybrid discount carrier, has been the subject of financial analysis due to its position in the competitive airline industry. The updated projections by Citi analysts take into account the company's performance indicators and market conditions that could affect its revenue and earnings potential in the coming years.
Investors and market watchers will likely monitor JetBlue's performance closely to see if the company meets or exceeds the revised expectations set forth by Citi's analysis. The airline's ability to achieve the anticipated RASM will be crucial in determining its financial health and stock performance in the future.
With a beta of 1.84, JetBlue's stock shows higher volatility than the broader market. For deeper insights into JetBlue's financial health and detailed analysis, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, BofA Securities has downgraded Southwest Airlines (NYSE:LUV) Co.'s stock rating from Neutral to Underperform due to concerns about the airline's limited involvement in corporate, premium, and international routes. This downgrade comes despite JetBlue Airways Corp.'s significant debt burden and negative free cash flow. Both airlines are seen as facing execution risks due to their expansion of product offerings.
Furthermore, JetBlue recently found two unidentified bodies in the wheel well of one of their planes after it landed in Fort Lauderdale. The airline is currently undergoing an investigation. In addition, JetBlue was hit with a $2 million fine by the US Transportation Department for continuous flight delays and setting unrealistic schedules.
In a recent interview, JetBlue CEO Joanna Geraghty urged the incoming administration to strengthen the country's air traffic control system, citing inadequate staffing and outdated technology as significant burdens. The airline also announced plans to introduce first-class sections on its domestic flights starting in 2026, in response to growing consumer demand for premium travel options.
Lastly, Morgan Stanley (NYSE:MS) resumed coverage of JetBlue stock with an Equalweight rating, focusing on the airline's strategic plan, known as JetForward, set to unfold in 2025.
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