Confident in its ability to complete its Spirit Airlines (NYSE: SAVE) acquisition, JetBlue Airways Corporation (NASDAQ: JBLU) kicked off the 2023 fiscal year with strong Q1 earnings. JBLU is now preparing for the second half of the year, which has historically been its strongest. Furthermore, JBLU provided positive EPS guidance for the full year which means JBLU could be back to profitability soon. As we are entering the summer season, JBLU stock could be poised for an extremely successful second half of the year.
JBLU Fundamentals
Spirit Acquisition on Hold
Despite the Spirit Airlines acquisition being put on hold due to the Department of Justice suing JBLU earlier this year to block the merger on the grounds that the merger will cause airfares to increase, JBLU is still committed and forging ahead with its planned acquisition. The Spirit Merger would see JBLU becoming the fifth largest airline in the US, which would mean that JBLU will expand its market reach and gain new customers at a different price level.
Furthermore, JBLU has entered an agreement with Frontier Airlines (NASDAQ: ULCC) to divest all Spirit Airlines holdings at New York’s LaGuardia Airport. While this may slightly hurt Spirit Airlines’ revenue it may be an important step to make sure the merger is completed successfully.
Summer Peak Approaching
After JBLU announced 34% YoY revenue growth in Q1 and capacity growth of 9% over the same period, it is expected to record higher revenue for the rest of the year with its weaker season out of the way. JBLU also expects its capacity to be up in Q2 between 4.5% to 7.5% YoY and revenue to increase between 4.5% to 8.5% YoY.
While the Federal Aviation Administration’s (FAA) 10% voluntary reductions for carriers may pose a problem not just for JBLU but for the whole aviation sector, JBLU is still going strong into its second quarter. JBLU is seeing two-thirds of its flights booked to date for the second quarter, in line with past quarters, and is also opening its own travel booking website, Paisley, which will help JBLU diversify its revenues.
Given its recent successes, it is not a surprise to see JBLU approaching its 2019 margins indicating that the company might return to profitability soon especially since it reduced its net loss to $192 million by nearly 25% YoY and forecasting a $0.70 to $1 EPS for the full year. Getting back to profitability may give JBLU stock a push to get back to its year high of $9.35 that it reached back in February.
JBLU Financials
In its Q1 2023 report, JBLU’s assets increased 5% QoQ from $1.9 billion to $2 billion, and its cash and cash equivalents increased 30% QoQ from $1 billion to $1.3 billion. JBLU’s total liabilities increased by 5% QoQ from $9.3 billion to $9.8 billion.
Revenue also increased 31% YoY from $1.6 billion to $2.1 billion. Operating costs increased 19% from $2.1 billion to $2.5 billion, which contributed to the operating loss decrease of 34% YoY from $367 million to $242 million, which amounted to a net loss of $192 million – a 24% decrease YoY.
Technical Analysis
JBLU stock’s trend is neutral with the stock trading in a sideways channel between $6.73 and $7.26. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, RSI is overbought at 74 and the MACD is bullish. It is worth noting that JBLU broke its sideways channel and is yet to retest the upper trendline. Based on this, investors could wait for the stock to retest the upper trendline to confirm breaking the channel which might make it a good entry ahead of JBLU’s upcoming catalysts.
As for the fundamentals, JBLU stock future catalysts will be the result of the Department of Justice lawsuit on October 16, 2023, and the completion of Spirit Airlines acquisition in case JBLU won the lawsuit. Since this acquisition will make JBLU the fifth largest airline in the US, the stock could soar to retest its 52-week high of $10.64.
JBLU Forecast
Q1 is historically JBLU’s weakest quarter, and with it showing great Q1 results, the rest of the year is looking bright for JBLU, especially since JBLU may return to profitability soon. JBLU is also confident in its ability to complete the Spirit Airlines merger which would make it the fifth largest airline in the US. All of that makes JBLU stock an attractive option in the aviation sector.
JBLU Fundamentals
Spirit Acquisition on Hold
Despite the Spirit Airlines acquisition being put on hold due to the Department of Justice suing JBLU earlier this year to block the merger on the grounds that the merger will cause airfares to increase, JBLU is still committed and forging ahead with its planned acquisition. The Spirit Merger would see JBLU becoming the fifth largest airline in the US, which would mean that JBLU will expand its market reach and gain new customers at a different price level.
Furthermore, JBLU has entered an agreement with Frontier Airlines (NASDAQ: ULCC) to divest all Spirit Airlines holdings at New York’s LaGuardia Airport. While this may slightly hurt Spirit Airlines’ revenue it may be an important step to make sure the merger is completed successfully.
Summer Peak Approaching
After JBLU announced 34% YoY revenue growth in Q1 and capacity growth of 9% over the same period, it is expected to record higher revenue for the rest of the year with its weaker season out of the way. JBLU also expects its capacity to be up in Q2 between 4.5% to 7.5% YoY and revenue to increase between 4.5% to 8.5% YoY.
While the Federal Aviation Administration’s (FAA) 10% voluntary reductions for carriers may pose a problem not just for JBLU but for the whole aviation sector, JBLU is still going strong into its second quarter. JBLU is seeing two-thirds of its flights booked to date for the second quarter, in line with past quarters, and is also opening its own travel booking website, Paisley, which will help JBLU diversify its revenues.
Given its recent successes, it is not a surprise to see JBLU approaching its 2019 margins indicating that the company might return to profitability soon especially since it reduced its net loss to $192 million by nearly 25% YoY and forecasting a $0.70 to $1 EPS for the full year. Getting back to profitability may give JBLU stock a push to get back to its year high of $9.35 that it reached back in February.
JBLU Financials
In its Q1 2023 report, JBLU’s assets increased 5% QoQ from $1.9 billion to $2 billion, and its cash and cash equivalents increased 30% QoQ from $1 billion to $1.3 billion. JBLU’s total liabilities increased by 5% QoQ from $9.3 billion to $9.8 billion.
Revenue also increased 31% YoY from $1.6 billion to $2.1 billion. Operating costs increased 19% from $2.1 billion to $2.5 billion, which contributed to the operating loss decrease of 34% YoY from $367 million to $242 million, which amounted to a net loss of $192 million – a 24% decrease YoY.
Technical Analysis
JBLU stock’s trend is neutral with the stock trading in a sideways channel between $6.73 and $7.26. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, RSI is overbought at 74 and the MACD is bullish. It is worth noting that JBLU broke its sideways channel and is yet to retest the upper trendline. Based on this, investors could wait for the stock to retest the upper trendline to confirm breaking the channel which might make it a good entry ahead of JBLU’s upcoming catalysts.
As for the fundamentals, JBLU stock future catalysts will be the result of the Department of Justice lawsuit on October 16, 2023, and the completion of Spirit Airlines acquisition in case JBLU won the lawsuit. Since this acquisition will make JBLU the fifth largest airline in the US, the stock could soar to retest its 52-week high of $10.64.
JBLU Forecast
Q1 is historically JBLU’s weakest quarter, and with it showing great Q1 results, the rest of the year is looking bright for JBLU, especially since JBLU may return to profitability soon. JBLU is also confident in its ability to complete the Spirit Airlines merger which would make it the fifth largest airline in the US. All of that makes JBLU stock an attractive option in the aviation sector.