Shares of JetBlue Airways (NASDAQ:JBLU) tanked nearly 8% on Tuesday after the company said that it expects fourth-quarter sales growth to remain at the lower end of its guidance range of 15% to 19%.
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The company’s performance in Q4 so far has been impacted by Hurricane Nicole, which hit Florida in early November. Further, JetBlue stated that demand in December remained below its expectations and “the adverse impact of the fourth quarter holiday calendar timing this year” affected sales.
Nevertheless, the airline finds overall demand trends to be encouraging based on “healthy load factors and yields above 2019 levels for both trough and peak travel periods.” JetBlue maintained its outlook for Q4 flown capacity to jump 1% to 4% from the third quarter of 2019.
JetBlue reported decent numbers in the Q3 quarter, with an adjusted profit of $0.21 per share, marking the first profitable quarter since the pandemic. Also, revenues climbed 30% year-over-year. The company is expected to release its Q4 results on January 26.
Furthermore, the company continues to undertake efforts to attract customers. It recently rolled out a new loyalty program with additional perks and announced the addition of several non-stop destinations from New York and Boston in 2023.
Is JetBlue a Buy, Sell, or Hold?
Currently, JBLU has a Hold consensus rating based on one Buy, one Hold, and two Sell recommendations. The average price target of $8.50 implies 19.7% upside potential from the current level. Shares of JBLU are down 51.7% so far this year.
Moreover, JetBlue trades at a price/sales multiple of 0.29, much lower compared to the sector median of 1.32x and the company’s five-year average of 0.86x. This implies that JBLU stock is currently undervalued and has considerable room to grow.
