On Wednesday, UBS analyst Thomas Wadewitz revised the price target on JetBlue Airways (NASDAQ:JBLU) shares, reducing it to $5.00 from the previous target of $5.50. Despite the adjustment, the firm continues to recommend a Sell rating for the airline's stock. Wadewitz pointed to several concerns, including JetBlue's recent performance and future outlook, which prompted the price target change. According to InvestingPro data, JetBlue's overall financial health score is rated as WEAK, with a concerning debt-to-capital ratio of 0.81.Want deeper insights? InvestingPro subscribers have access to over 10 additional key insights about JetBlue's financial situation.
JetBlue's stock has experienced a significant decline, dropping 25.7% in contrast to the S&P 500's gain of 0.9%. This steep decrease is attributed to the company's first-quarter Revenue per Available Seat Mile (RASM) guidance, which fell short of expectations. The midpoint of JetBlue's RASM guidance is around 1.5% year-over-year, considerably weaker compared to its competitors. Network (LON:NETW) carriers such as Delta Air Lines (NYSE:DAL), United Airlines, and American Airlines (NASDAQ:AAL) have projected RASM ranges of approximately 3.5% to 5%, while Alaska Airlines anticipates high single-digit growth.
Another factor contributing to the lowered price target is the ongoing issue with grounded aircraft due to the GTF engine problems. The number of aircraft on the ground has been escalating, from around 6 in 2023 to 11 in 2024, and approximately 15 in 2025. JetBlue has even suggested that this number could continue to rise in 2026.
The airline's guidance also indicates substantial challenges ahead. With midpoints of 6.0% for Cost per Available Seat Mile excluding fuel (CASM ex) and 4.5% for RASM, JetBlue appears to be facing persistent core margin headwinds throughout 2025. These issues, as outlined by Wadewitz, underscore the reasoning behind the Sell rating and the reduced price target for JetBlue's shares.
In other recent news, JetBlue reported fourth-quarter revenue hitting the upper end of its guidance and adjusted earnings per share slightly surpassing consensus estimates. However, the airline's financial outlook for the first quarter of 2025 suggests earnings per share of approximately $(0.65). Analyst firms BofA Securities, Seaport Global Securities, Melius Research, and Goldman Sachs (NYSE:GS) have all recently issued ratings on JetBlue. BofA Securities reduced its price target to $5.25, maintaining an underperform rating, while Seaport Global Securities downgraded JetBlue's stock from Buy to Neutral due to ongoing issues with Pratt & Whitney engine defects. Melius Research maintained its Hold rating with a steady price target of $7.00, and Goldman Sachs kept a sell rating with a target of $5.50.
In other developments, JetBlue launched a new premium credit card, the JetBlue Premier World Elite Mastercard (NYSE:MA)®, in partnership with Barclays (LON:BARC) US Consumer Bank, targeting frequent travelers. The company also introduced Venmo as a payment method for flight bookings on its website, marking a first in the airline industry, and announced plans to introduce first-class sections on its domestic flights starting in 2026. However, operational challenges persist, including a $2 million fine imposed by the US Transportation Department for continuous flight delays and setting unrealistic schedules. These are the recent developments shaping JetBlue's operations and investor outlook.
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