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JetBlue: A Look at Wall Street Analyst Estimates

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Analyst revenue estimate

For JetBlue’s (JBLU) 2Q17 earnings, analysts’ consensus estimate is for revenues to grow 10.1% year-over-year or YoY to $1.8 billion. For 3Q17 and 4Q17, revenues are expected to rise 9.4% YoY and 9.2% YoY to $1.9 billion and $1.8 billion, respectively. This forecast would mean full-year 2017 revenue growth of 6.9% YoY to $7.1 billion.

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Analysts’ earnings estimates

For 2Q17, EBITDA[1. Earnings before interest, tax, depreciation, and amortization] are expected to rise 2.3% to $418.3 million. The growth rate is expected to rise for the rest of the year. For 3Q17, EBITDA is expected to rise 4.2% to $475 million and for 4Q17 by 7.4% to 428.5 million. Despite the growth we’ve seen in these three quarters, the huge decline we saw in the first quarter could lead to a full-year 2017 EBITDA decline of 8% to $1.6 billion.

The consensus earnings per share (or EPS) are expected to fall 16.8% to $1.85 for the 2017 overall.

Analyst margin estimate

Most of the decline discussed above resulted from rising fuel and labor costs, which could mean falling EBITDA margins. For 1Q17, JetBlue’s EBITDA margin fell to 15.7% from 27.2% in 1Q16. Analysts expect JetBlue’s margin to continue falling for the rest of the year. Margins are expected to fall to 23.1% in 2Q17, compared to 24.9% in 2Q16, and to 25.1% in 3Q17, compared to 26.3% in 3Q16, and to 23.9% in 4Q17, compared to 24.3% in 4Q16. For 2017 overall, EBITDA margins are expected to fall to 22.2% from 25.7% in 2016.

Investors can gain exposure to airlines through the SPDR S&P Transportation ETF (XTN), which invests ~3% of its holdings in Southwest Airlines (LUV) and Alaska Airlines (ALK), 2.8% in Allegiant Travel (ALGT), 2.7% in United Continental (UAL), 2.7% in American Airlines (AAL), and 2.7% in Delta Air Lines (DAL)

Next, we’ll look at analysts’ recommendations for the stock.

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