Skip to main content

NEW YORK (TheStreet) - JetBlue Airways (JBLU) - Get JetBlue Airways Corporation Report plans to launch a premium service catering to higher-paying customers by summer 2014. The airline originally built its brand on a single-class model and budget airfares. The service, called 'Mint', will focus on the business-heavy routes of New York to Los Angeles and San Francisco.

JetBlue shares lost 0.07% to $6.66 at market's close. The S&P 500 which ended the day down 0.6%. Rival airlines Delta Air Lines (DAL) - Get Delta Air Lines, Inc. Report, US Airways (LCC) and Southwest Airlines (LUV) - Get Southwest Airlines Co. Report were trading mixed at the close of trading. Delta gained 0.08% to $23.59, US Airways was 0.63% lower to $18.96, and Southwest was down 0.55% to $14.56.

TheStreet Ratings team rates JetBlue Airways as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate JetBlue Airways (JBLU) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Scroll to Continue

TheStreet Recommends

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JBLU's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, JBLU's share price has jumped by 38.77%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • JetBlue Airways' earnings per share declined by 31.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JetBlue Airways increased its bottom line by earning 39 cents vs. 28 cents in the prior year. This year, the market expects an improvement in earnings (46 cents vs. 39 cents).
  • Even though the current debt-to-equity ratio is 1.46, it is still below the industry average, suggesting that this level of debt is acceptable within the Airlines industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.48 is very low and demonstrates very weak liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Airlines industry and the overall market, JetBlue Airways' return on equity is below that of both the industry average and the S&P 500.

Written by Keris Alison Lahiff.