One Reason JetBlue (JBLU) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of JetBlue Airways  (JBLU) are higher by 0.52% to $15.17 Friday afternoon, continuing its gain after airline stocks hit their highest levels in almost 14 years yesterday, following higher earnings estimates for six U.S. carriers by analysts at JPMorgan Chase, Bloomberg reports.

JPMorgan Chase said airline stocks are undervalued, and raised its price target on shares of JetBlue to $18.50 from $15.50 with a "neutral" rating.

Analysts at the firm added that investors haven't boosted airline stocks commensurately with the "precipitous" decline in fuel prices, noting that domestic fares are higher and transatlantic capacity hasn't gone up as expected.

Must Read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Long Island City, NY-based JetBlue is a passenger airline with its fleet of 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft, with most flights having as an origin or destination of New York City.

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, growth in earnings per share, increase in net income, revenue growth and attractive valuation levels. 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 55.78% 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 ($0.68 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 30.5%. 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.
  • You can view the full analysis from the report here: JBLU Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

Stocks Lose Steam as Yields Hover Near 3% Threshold

Stocks Lose Steam as Yields Hover Near 3% Threshold

Video: Stop Using Student Loan Money to Buy Bitcoin

Video: Stop Using Student Loan Money to Buy Bitcoin

Let the Najarian Brothers Crash-Proof Portfolio

Let the Najarian Brothers Crash-Proof Portfolio

Facebook Sends Facial Recognition Notification in Error

Facebook Sends Facial Recognition Notification in Error

3 Hot Reads From TheStreet's Top Premium Columnists

3 Hot Reads From TheStreet's Top Premium Columnists