JetBlue: The Latest Analyst Estimates and Recommendations

Following JetBlue’s 2Q16 earnings release, analysts’ consensus estimate for revenues remains unchanged. However, earnings estimates have declined. For 4Q16, sales are expected to grow 1.5% to $1.6 billion. EBITDA are expected to fall 10.5% to $377.5 billion versus an earlier expectation of 7.8% decline to $390 million. The consensus earnings per share (or EPS) are expected to fall 18% to $0.46 for 4Q16 versus the earlier estimate of a 14.4% decline to $0.48.

For 2016 as a whole, analysts estimate that sales will rise 3.1% to $6.6 billion—the same as the earlier estimate. EBITDA is expected to rise 7.5% to $1.7 billion. EPS are expected to rise ~9.5% to $2.12.

Analysts are expecting JetBlue’s sales to grow 6.6% for 2017 and 7% for 2018. However, EBITDA are expected to fall 6% for both 2017 and 2018. For 2017, analysts are expecting JetBlue EPS to fall 9% to $1.97. For 2018, EPS are expected to fall 2.6% to $1.92.

Of the 14 analysts rating the stock, 64.3% (nine analysts) have a “buy” rating, 35.7% (five analysts) have a “hold” rating, and none of the analysts have a “sell” rating.

JetBlue’s consensus 12-month target has fallen slightly to $22.17 as against the pre-earnings estate of $22.45. The current target price indicates a 22.7% return potential as of the October 25, 2016, closing price of $18.07. Analysts’ 12-month target prices for JBLU’s peers are as follows.

• Delta Air Lines (DAL): $49.4 with a 19.9% return potential
• Southwest Airlines (LUV): $48.92 with 16.6% return potential
• Spirit Airlines (SAVE): $55.36 with 13.8% return potential
• United Airlines (UAL): $61.36 with 12.3% return potential
• Alaska Airlines (ALK): $85.8 with 18.5% return potential
• American Airlines (AAL): $42 with 5.8% return potential

JBLU forms ~0.8% of the iShares S&P Mid-Cap 400 Growth ETF (IJK). Next, we wrap up this series by looking at JBLU’s valuation compared to peers.