Why JetBlue Airways (JBLU) Stock Is Down This Afternoon

NEW YORK (TheStreet) -- Shares of JetBlue Airways Corp. (JBLU) are lower by -2.45% to $10.71 on Wednesday afternoon as airline stocks are negatively affected by Delta Airlines'  (DAL) report that June passenger revenue per available seat mile grew 4%, but did not meet the company's previous guidance of a 5% to 7% growth.

Delta said its June PRASM data was the result of lower than expected international yields, and lower business demand to Latin America due to the World Cup.

Other airline stocks falling today include Spirit Airlines Inc. (SAVE) down by -1.33% to $63.92, United Continental (UAL) lower by -6.01% to $39.72, and American Airlines Group (AAL) down -4.08% to $42.07.

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Separately, TheStreet Ratings team rates JETBLUE AIRWAYS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate JETBLUE AIRWAYS CORP (JBLU) a BUY. This is driven by a few notable 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 solid stock price performance, revenue growth, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • Compared to its closing price of one year ago, JBLU's share price has jumped by 74.87%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The revenue growth significantly trails the industry average of 46.0%. Since the same quarter one year prior, revenues slightly increased by 3.8%. 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.
  • JETBLUE AIRWAYS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 CORP increased its bottom line by earning $0.51 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus $0.51).
  • Net operating cash flow has significantly increased by 57.07% to $322.00 million when compared to the same quarter last year. Despite an increase in cash flow, JETBLUE AIRWAYS CORP's average is still marginally south of the industry average growth rate of 63.74%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Airlines industry and the overall market, JETBLUE AIRWAYS CORP's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: JBLU Ratings Report
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