NEW YORK (TheStreet) -- Shares of JetBlue Airways Corporation (JBLU) are falling, down 4.72% to $11.61 in late morning trading, after analysts at Bank of America/Merrill Lynch (BAC) downgraded the airline company to "underperform" from "neutral" earlier today.
The firm said its expectations over management change are too aggressive and its estimates are too high, citing slowing revenue gains and increasing competitive capacity.
Bank of America/Merrill Lynch lowered its price target to $10.50 from its previous $11.
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 some important positives, 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, impressive record of earnings per share growth, compelling growth in net income, revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 518.18% and other important driving factors, this stock has surged by 88.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- JETBLUE AIRWAYS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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 ($0.69 versus $0.51).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 538.9% when compared to the same quarter one year prior, rising from $36.00 million to $230.00 million.
- The revenue growth significantly trails the industry average of 47.6%. Since the same quarter one year prior, revenues rose by 11.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- You can view the full analysis from the report here: JBLU Ratings Report
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