U.S.-based carrier JetBlue Airways (JBLU) is under scrutiny from analysts after its disappointing guidance triggered a stock drop of over 25%. The company posted a net loss of $0.21 per share for Q4 2024, beating Wall Street’s expectations of a $0.29 loss. However, its underwhelming guidance for the first quarter of 2025 left investors disheartened. In response, several analysts have reevaluated their ratings and adjusted their price targets.
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JetBlue’s Guidance Fails to Impress
The company projected its revenue for Q1 2025 to range from a 0.5% decline to a 3.5% increase compared to the same period in 2024, falling significantly short of the 4.8% growth anticipated by analysts.
The company also forecasted a rise of up to 7% in unit costs, excluding fuel, for 2025 compared to 2024. For Q1 2025, it is expected that this metric will increase by as much as 10% year-over-year. Notably, JetBlue is currently executing a cost-reduction strategy by eliminating unprofitable routes, delaying new aircraft deliveries, and increasing revenue through higher-priced seats.
Analysts Weigh in on JetBlue’s Outlook
BofA analyst Andrew Didora reduced his price target from $6.5 to $5.5 on JBLU while maintaining his Sell rating. Didora considers the airline’s estimate to be possibly conservative. He believes the actual results may come in closer to the upper end of the company’s projected range. However, he also expects that ongoing problems with Pratt & Whitney engines will peak between 2026 and 2027, potentially limiting JetBlue’s growth prospects and driving up unit costs.
Meanwhile, Conor Cunningham at Melius Research reaffirmed his Hold rating on the stock. Cunningham expressed concerns over JetBlue’s focus on expanding its East Coast leisure routes, warning that it could increase the risk of market concentration. He also highlighted JetBlue’s challenges in attracting passengers, particularly with Delta’s (DAL) expansion and enhanced services.
Is JetBlue Stock a Good Buy?
As per the consensus rating on TipRanks, JBLU stock has a Moderate Sell rating based on 12 recommendations. It includes eight Hold and four Sell ratings. The JetBlue Airways share price target is $6.74, which is 12.15% above the current price level.
