In what may be the ultimate moment that shows you never can tell about the stock market, airline stock JetBlue (NASDAQ:JBLU) offered up some pessimistic guidance about its third-quarter bookings. It also dropped its revenue expectations. And how did investors take it? To the bank, that’s how they took it. JetBlue stock was up over 4% in Thursday afternoon’s trading.
JetBlue told investors very little that the rest of the air travel market hasn’t been saying right along. Bookings are down, and the formerly vibrant travel sector—which benefited greatly from pent-up demand from the pandemic—is starting to lose ground as consumers pull in their wallets and hunker down. That wasn’t all that JetBlue had to say, though; it also noted that a combination of “air traffic control” and “weather-related disruptions” hit JetBlue hard in particular. As a result, revenue will be toward the low end of previous guidance.
That’s not all, though; JetBlue is currently facing a Congressional inquiry about its planned merger with Spirit Airlines (NYSE:SAVE). Apparently, the U.S. Senate got some documents that suggested fares could go up by as much as 40% if the merger goes through, and that was clearly not something senators were going to let go by without a fight. JetBlue noted that the documents revealing the huge price hike were a “…spin on confidential evidence” and that “…the factual evidence…will demonstrate that JetBlue intends for the merger with Spirit to increase competition and help lower fares across the board.”
Is JetBlue a Good Stock to Buy Now?
Meanwhile, analysts are a bit more skeptical. With five Hold ratings and one Sell, JetBlue stock is rated a Hold by analyst consensus. Further, with an average price target of $6.17, JetBlue stock offers investors a 33.41% upside potential.
