Shares of JetBlue Airways Corp. jumped more than 4% on Monday after the airline company announced an operational and financial update of its business.
JetBlue (JBLU) anticipates flown capacity for the first quarter of 2021 to decline about 41% year-over-year, up from the company’s previous planning assumption of 40%. Notably, managing and aligning capacity with demand on a rolling basis are likely to continue.
For the first quarter of 2021, the company projects revenue to decline between 61% and 64%, down from the prior range of 65% to 70%. The revision in outlook comes on the heels of improved bookings by leisure and visiting friends and relatives (VFR) customers.
Additionally, JetBlue expects total operating expenses to decrease 25% year-over-year, despite a slight rise in fuel prices. EBITDA is likely to generate a loss in the range of $490 million to $540 million, better than the prior loss assumption range of $525 million to $625 million. (See JetBlue stock analysis on TipRanks)
On March 5, Raymond James analyst Savanthi Syth maintained a Hold rating on the stock.
Syth believes “JetBlue has been one of the pioneers in the industry bringing Environmental initiatives and investments to the forefront of its strategy with the company announcing in January 2020 that it will offset emissions from jet fuel for all domestic flights starting July 2020.”
Further, the analyst noted, “Longer term, JetBlue has pledged to achieve net zero emissions by 2040 (10 years ahead of the Paris Agreement target).”
Wall Street analysts are cautiously optimistic about the stock. The Moderate Buy consensus rating breaks down into 4 Buy ratings, 7 Hold ratings, and 1 Sell rating. The average analyst price target stands at $17.33 and implies downside potential of about 20% to current levels. Shares have rallied almost 52% so far this year.
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