Is JetBlue Airways Stock Headed for a Breakdown? – September 10, 2021

JetBlue Airways Corporation (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’s passenger revenues soared 22.4% in the first half of 2021 as air travel demand improved due to more people getting vaccinated. But revenues for the third quarter are expected to be lower than before the pandemic with capacity expected to be flat and fuel prices rising.

JBLU had $3.7 billion in cash as of the most recent quarter which compares favorably to only $432 million in short-term debt. However, the company has a negative profit margin of -28%. Total revenue is forecasted to rise 297% year over year in the current quarter leading to a Growth Grade of B in the POWR Ratings system.

The stock appears undervalued with a trailing P/E of 13.78 and a forward P/E of 16.75. The stock started the year strong in an uptrend, but has shown negative momentum since May. This is evident in the chart below.

Take a look at the 1-year chart of JBLU below with added notations:

JBLU has tested the $14 level (green) many times over the past year. The stock may be falling back down to that support again, and a break below $14 could mean much lower prices for the stock.

If the stock were to break below the $14 support level, a short position could be entered.

JBLU shares were trading at $15.15 per share on Friday morning, down $0.15 (-0.98%). Year-to-date, JBLU has gained 4.20%, versus a 21.04% rise in the benchmark S&P 500 index during the same period.

Author: Christian Tharp