We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How Should Investors Approach JetBlue Post Bullish Q3 Outlook?
Read MoreHide Full Article
Key Takeaways
JetBlue raised Q3 guidance for capacity and revenue per seat mile after strong summer bookings.
The airline cut its fuel cost forecast and trimmed non-fuel unit cost expectations for Q3.
JetBlue trades at a discount to peers but faces pressure from rising debt and labor expenses.
Early this month, JetBlue Airways Corporation’s (JBLU - Free Report) management stated that booking trends were impressive throughout the peak summer season. As a result, the low-cost carrier gave an improved view for capacity growth and operating revenue per available seat mile (RASM) for the September quarter.
Given this backdrop, the question that naturally arises is: Should investors buy, hold, or sell JBLU stock now? A more in-depth analysis is needed to make that determination. Before diving into JBLU’s investment prospects, let’s take a glance at its financial numbers.
JBLU's Improved Q3 Outlook on Upbeat Air-Travel Demand
JetBlue now anticipates available seat miles (ASMs) for the third quarter to be flat to up 1% year over year compared with the prior guidance of down 1% to up 2%. Further, JBLU anticipates third-quarter operating revenue per ASM (RASM) to decline in the range of 1.5%-4% year over year, an improvement from the prior outlook of 2%-6% decrease.
Consistency in air travel demand continued from the summer season through August and the Labor Day holiday, all of which was reflected in the rising number of bookings within 14 days of travel. Strong operational performance during August, in addition to the carrier’s cost management actions, aided JBLU’s non-fuel unit costs. JBLU now expects third-quarter costs per available seat mile (excluding fuel and special items) to increase in the range of 3.5-5.5%, down from the prior expectation of a 4%-6% increase.
JBLU lowers its third-quarter 2025 average fuel cost per gallon guidance to the range of $2.45-$2.55 from the previously guided range of $2.50 to $2.65. Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any airline company.
Impressive Valuation Picture for JBLU Stock
From a valuation perspective, JBLU is trading at a discount compared to the industry, going by its forward 12-month price-to-sales ratio.
The stock has a forward 12-month P/S-F12M of 0.19X compared with 0.67X for the industry over the past five years. The company’s forward 12-month P/S-F12M ratio is also below the median level of 0.25X over the past five years. These factors indicate that the stock’s valuation is attractive.
JBLU P/S Ratio (Forward 12 Months) Vs. Industry
Image Source: Zacks Investment Research
High Debt Weighs on JetBlue Stock
We are concerned about JBLU’s high debt levels. The low-cost carrier’s long-term debt level has increased to $7.7 billion at the end of second-quarter 2025 from $3.1 billion at 2022-end.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
JBLU’s Price Performance
Shares of JBLU have not had a good time on the bourses of late, declining in double-digits so far this year. The disappointing price performance resulted in JBLU underperforming the Zacks Airline industryin the said time frame. Moreover, JBLU’s price performance compares unfavorably with that of fellow U.S. airline operators Southwest Airlines Co. (LUV - Free Report) ) and Delta Air Lines (DAL - Free Report) in the same timeframe.
JBLU Stock YTD Price Comparison
Image Source: Zacks Investment Research
To Conclude
It is understood that JBLU stock is attractively valued, and upbeat air travel demand is contributing to JBLU’s top line. JBLU's efforts to modernize its fleet look encouraging, too. Despite the positives, we advise investors not to buy JBLU stock now due to high labor costs, which are hurting the bottom line by pushing up operating costs. Additionally, high debt levels are concerning, too.
Image: Bigstock
How Should Investors Approach JetBlue Post Bullish Q3 Outlook?
Key Takeaways
Early this month, JetBlue Airways Corporation’s (JBLU - Free Report) management stated that booking trends were impressive throughout the peak summer season. As a result, the low-cost carrier gave an improved view for capacity growth and operating revenue per available seat mile (RASM) for the September quarter.
Given this backdrop, the question that naturally arises is: Should investors buy, hold, or sell JBLU stock now? A more in-depth analysis is needed to make that determination. Before diving into JBLU’s investment prospects, let’s take a glance at its financial numbers.
JBLU's Improved Q3 Outlook on Upbeat Air-Travel Demand
JetBlue now anticipates available seat miles (ASMs) for the third quarter to be flat to up 1% year over year compared with the prior guidance of down 1% to up 2%. Further, JBLU anticipates third-quarter operating revenue per ASM (RASM) to decline in the range of 1.5%-4% year over year, an improvement from the prior outlook of 2%-6% decrease.
Consistency in air travel demand continued from the summer season through August and the Labor Day holiday, all of which was reflected in the rising number of bookings within 14 days of travel. Strong operational performance during August, in addition to the carrier’s cost management actions, aided JBLU’s non-fuel unit costs. JBLU now expects third-quarter costs per available seat mile (excluding fuel and special items) to increase in the range of 3.5-5.5%, down from the prior expectation of a 4%-6% increase.
JBLU lowers its third-quarter 2025 average fuel cost per gallon guidance to the range of $2.45-$2.55 from the previously guided range of $2.50 to $2.65. Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any airline company.
Impressive Valuation Picture for JBLU Stock
From a valuation perspective, JBLU is trading at a discount compared to the industry, going by its forward 12-month price-to-sales ratio.
The stock has a forward 12-month P/S-F12M of 0.19X compared with 0.67X for the industry over the past five years. The company’s forward 12-month P/S-F12M ratio is also below the median level of 0.25X over the past five years. These factors indicate that the stock’s valuation is attractive.
JBLU P/S Ratio (Forward 12 Months) Vs. Industry
Image Source: Zacks Investment Research
High Debt Weighs on JetBlue Stock
We are concerned about JBLU’s high debt levels. The low-cost carrier’s long-term debt level has increased to $7.7 billion at the end of second-quarter 2025 from $3.1 billion at 2022-end.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
JBLU’s Price Performance
Shares of JBLU have not had a good time on the bourses of late, declining in double-digits so far this year. The disappointing price performance resulted in JBLU underperforming the Zacks Airline industryin the said time frame. Moreover, JBLU’s price performance compares unfavorably with that of fellow U.S. airline operators Southwest Airlines Co. (LUV - Free Report) ) and Delta Air Lines (DAL - Free Report) in the same timeframe.
JBLU Stock YTD Price Comparison
Image Source: Zacks Investment Research
To Conclude
It is understood that JBLU stock is attractively valued, and upbeat air travel demand is contributing to JBLU’s top line. JBLU's efforts to modernize its fleet look encouraging, too. Despite the positives, we advise investors not to buy JBLU stock now due to high labor costs, which are hurting the bottom line by pushing up operating costs. Additionally, high debt levels are concerning, too.
We advise investors to wait for a better entry point. For those who already own the stock, it will be prudent to stay invested. The stock’s Zacks Rank #3 (Hold) supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.