"Our upgrade on JetBlue reflects its improved operating performance and reduced debt, which have strengthened the company's credit measures," analyst Betsy Snyder said.
Analysts added that they expect the carrier to maintain its stronger operating performance, due to lower fuel prices and keeping its credit metrics relatively stable through 2016.
The company today announced plans for two new routes serving Baltimore and Philadelphia to Florida. The service will launch in November.
Meanwhile, oil prices rebounded today, settling up 1.71%, after government data showed a drop in U.S. crude-oil and petroleum-product supplies, The Wall Street Journal reported.
U.S. commercial crude-oil inventories fell by 2.7 million barrels in the week that ended on May 15, according to the U.S. Energy Information Administration. Analysts surveyed by The Wall Street Journal expected a 1.1 million barrel decline.
Due to rising oil prices in part because of Japan's strong economy, improving consumer confidence in Australia, and tensions in the Middle East, shares of JetBlue Airways closed down 6.8% to $20.27 on Wednesday.
Other airline sector are also plummeting, with Southwest (LUV) seeing its biggest drop in three years this afternoon and American Airlines (AAL) having its worst day since coming out of bankruptcy in 2013, Bloomberg reports.
TheStreet Ratings team rates JETBLUE AIRWAYS CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate JETBLUE AIRWAYS CORP (JBLU) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 12.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 3900.00% and other important driving factors, this stock has surged by 144.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, JBLU should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 $1.19 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.19).
- 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 3325.0% when compared to the same quarter one year prior, rising from $4.00 million to $137.00 million.
- 37.16% is the gross profit margin for JETBLUE AIRWAYS CORP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 8.99% is above that of the industry average.
- You can view the full analysis from the report here: JBLU Ratings Report