JetBlue Airways Corp. (JBLU) is a low-cost airline that offers high-quality service, including assigned seating and in-flight entertainment. It carries over millions of customers with an average of more than 1,000 daily flights and serves approximately 99 destinations in the United States, the Caribbean, and Latin America.
The company posted a loss in third-quarter, making it the seventh successive quarterly loss. But passenger revenue did increase by more than 100% year over year due to an improvement of air-travel demand. Unfortunately, increasing fuel prices may eat into its bottom line.
JBLU has a strong balance sheet with $3.3 billion in cash as of the latest quarter. This compares favorably to only $391 million in short-term debt. As for growth, Analysts expect sales to jump 176.8% year over year in the current quarter, leading to a Growth Grade of B in our POWR Ratings system.
The stock does look overvalued, though, with a forward P/E of 34.25. JBLU was showing bullish momentum at the beginning of the year, only to tumble from March through August and September. Performance has been mixed since, but the stock has recently been trending down again. This is evident in the chart below.
Take a look at the 1-year chart of JBLU below with added notations:
JBLU has formed an important level of support at around $14 (blue) over the past year. The stock has repeatedly rallied off that mark, but now it has fallen back down to that level again. If JBLU were to break support, lower prices will likely follow from there.
If the stock were to break below the support, a trader could enter a short position with a protective stop order placed above the entry point.
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JBLU shares were trading at $14.67 per share on Tuesday morning, up $0.17 (+1.17%). Year-to-date, JBLU has gained 0.89%, versus a 26.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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