One Reason JetBlue Airways (JBLU) Stock Is Falling Today

NEW YORK (TheStreet) -- Shares of JetBlue Airways Corp. (JBLU) are down 2.08% to $12.68 in pre-market trading Wednesday after the company was downgraded to "neutral" from "overweight" at JPMorgan Chase.

The firm reaffirmed its price target of $15.50 for the American low-cost airline.

JPMorgan Chase says it lowered JetBlue Airways' rating as shares have handily outperformed sector and investors should look to take profits given current valuation.

"While we anticipate JBLU will come out swinging and quantify several return-enhancing initiatives to propel 2015 estimates above the $1 consensus, the likelihood of surpassing our Street-high $1.60 seems low," said analysts at JP Morgan.

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 several positive factors, 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, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

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

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 67.67% over the past year, a rise that has exceeded that of the S&P 500 Index. 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 has improved earnings per share by 14.3% 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 ($0.67 versus $0.51).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Airlines industry average. The net income increased by 11.3% when compared to the same quarter one year prior, going from $71.00 million to $79.00 million.
  • JBLU's revenue growth trails the industry average of 32.5%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.99, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • You can view the full analysis from the report here: JBLU Ratings Report
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