JetBlue Airways Corporation (JBLU) operates a low-cost discount airline that offers point-to-point service in the U.S and the Caribbean. Favorable jet fuel prices and an increase in passenger load levels, higher average ticket prices and excellent management of resources make JetBlue Airways a high-value choice, earning JBLU stock a five-star “buy” rating from Standard & Poor’s.
In addition to excellent management of resources, JetBlue was recently awarded gate positions at the busy Reagan National Airport that were recently vacated by American Airlines Group Inc (AAL). The award of these gates is expected to “re-accelerate revenue growth,” S&P says. And on Friday, JetBlue filed for an agreement with Icelandair to provide easy connections between the two carriers to Reykjavik and thus to European cities.
S&P recently raised its 2015 earnings estimate to $1.49 per share from $1.05 and its 12-month target to $20, up $5. Fourth-quarter earnings of 26 cents per share, reported on Jan. 29, beat the estimate of 23 cents.
JBLU stock has risen more than 50% since its low in October. It smashed to a new nine-year high on the outstanding earnings report and probably will continue the advance following a brief consolidation. On Friday, the stock gained against a general market headwind, which illustrates its strong momentum.
Stocks that advance in the face of widespread market selling are generally good prospects for traders. However, JBLU might be due for a consolidation after the excellent earnings and thus should be placed on the list of stocks that we would like to own.
Our “buy under” price for JBLU is $15.75 to $16. The trading target for JetBlue is $22, which if achieved would provide buyers a profit of more than 35%. A stop-loss order should be placed at $14.
