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JetBlue Slips to a 52-Week Low: What's Pulling it Down?
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Shares of Long Island City, New York-based JetBlue Airways Corporation (JBLU - Free Report) tumbled to a 52-week low of $16.20 on Jun 22.
Terrorism
JetBlue, like its peers in the airline space such as Delta Air Lines, Inc. (DAL - Free Report) and Southwest Airlines Co. (LUV - Free Report) , has been suffering due to the recent act of terror at a nightclub in Orlando on Jun 12. In fact, shares of the low-cost carrier have declined more than 10% since the mass shooting, described as the worst one in the history of the U.S.
Such acts of terror are becoming increasingly common, hurting travel demand substantially. Thus, it is no surprise that the Orlando attack resulted in a widespread sell-off in the airline space. This is exemplified by the NYSE ARCA Airline index declining over 4% since the Orlando shootings. The “Trans-Airline” sector currently has a Zacks Industry Rank #196 – placing it in the bottom 1/3rd of the 260+ industry groups.
Unit Revenue
JetBlue has also been hurt by the below-par guidance issued by the carrier earlier in the month. The carrier now expects operating revenue per available seat mile (RASM: a key measure of unit revenue) decline in the band of 7.5% to 8.5% for the second quarter of 2016 as compared to a decline of 7% expected earlier. The company has also lowered its capacity guidance for the year. Projected ASM growth has been slashed to a range of 8%–9.5% from 8.5%–10.5% projected earlier.
Estimates
We note that earnings estimates for JetBlue are moving south due to the factors working against it. Over the last 30 days, the Zacks Consensus Estimate for 2016 earnings has gone down 13 cents to $2.19 per share on the back of downward revisions analysts. Likewise, the Zacks Consensus Estimate for 2017 declined by 19 cents in the last month to $2.23 per share. No wonder, with so many headwinds confronting the carrier, JetBlue slipped to a Zacks Rank #5 (Strong Sell).
With JetBlue under pressure, investors interested in the airline space may consider SkyWest, Inc. (SKYW - Free Report) , which sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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JetBlue Slips to a 52-Week Low: What's Pulling it Down?
Shares of Long Island City, New York-based JetBlue Airways Corporation (JBLU - Free Report) tumbled to a 52-week low of $16.20 on Jun 22.
Terrorism
JetBlue, like its peers in the airline space such as Delta Air Lines, Inc. (DAL - Free Report) and Southwest Airlines Co. (LUV - Free Report) , has been suffering due to the recent act of terror at a nightclub in Orlando on Jun 12. In fact, shares of the low-cost carrier have declined more than 10% since the mass shooting, described as the worst one in the history of the U.S.
Such acts of terror are becoming increasingly common, hurting travel demand substantially. Thus, it is no surprise that the Orlando attack resulted in a widespread sell-off in the airline space. This is exemplified by the NYSE ARCA Airline index declining over 4% since the Orlando shootings. The “Trans-Airline” sector currently has a Zacks Industry Rank #196 – placing it in the bottom 1/3rd of the 260+ industry groups.
Unit Revenue
JetBlue has also been hurt by the below-par guidance issued by the carrier earlier in the month. The carrier now expects operating revenue per available seat mile (RASM: a key measure of unit revenue) decline in the band of 7.5% to 8.5% for the second quarter of 2016 as compared to a decline of 7% expected earlier. The company has also lowered its capacity guidance for the year. Projected ASM growth has been slashed to a range of 8%–9.5% from 8.5%–10.5% projected earlier.
Estimates
We note that earnings estimates for JetBlue are moving south due to the factors working against it. Over the last 30 days, the Zacks Consensus Estimate for 2016 earnings has gone down 13 cents to $2.19 per share on the back of downward revisions analysts. Likewise, the Zacks Consensus Estimate for 2017 declined by 19 cents in the last month to $2.23 per share. No wonder, with so many headwinds confronting the carrier, JetBlue slipped to a Zacks Rank #5 (Strong Sell).
JETBLUE AIRWAYS Price
JETBLUE AIRWAYS Price | JETBLUE AIRWAYS Quote
A Key Airline Pick
With JetBlue under pressure, investors interested in the airline space may consider SkyWest, Inc. (SKYW - Free Report) , which sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>