JetBlue Airways (JBLU) Stock Gains on Bullish Airline Industry Note

NEW YORK (TheStreet) -- JetBlue Airways (JBLU) shares are up 3.07% to $20.16 in trading on Wednesday as falling oil prices prop up the airline sector today.

Industry standard Brent crude for July delivery is down 2.12% to $62.37 per barrel, while West Texas crude for July delivery is down 0.67% to $57.64 per barrel.

Earlier today analysts at Credit Suisse wrote a note advising investors to take advantage of excessively speculative nature of the oil industry that is in the midst of a nearly 12 month long downturn. 

"We note that speculative positions in oil are excessive and appear to have peaked. Ordinarily, this leads to a fall in the oil price. Additionally, if the oil price rose significantly from here it would threaten Saudi Arabia's market share strategy(which it implemented at an $80p/b oil price) especially with shale capex being switched back on at $65p/b," said analyst Andrew Garthwaite.

"US airlines are very oil sensitive (10% off the oil price has historically led to 14% outperformance), are cheap on P/E relatives and oversold. Capital discipline still looks reasonable (with capex to sales still at the low end of its historical range). Our analysts have an Outperform rating on Delta Air Lines, JetBlue Airways, Southwest Airlines and United Continental," Garthwaite said.

American Airlines (AAL) shares are also up, 1.83% to $42.31, while Delta Airlines (DAL) shares are climbing 1.49% to $42.47 in trading today.

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 1.0%. 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 127.25% 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

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