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Analysts Have a Mixed Stance on JetBlue Airways Stock

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Mixed stance

Analysts have a mixed stance on JetBlue Airways (JBLU) in the near term. Analysts polled by Reuters have given it a consensus “hold” recommendation. About 35% of the 20 analysts covering the stock have given it a bullish recommendation. Approximately 50% of analysts have suggested holding it while the remaining 15% recommend selling the stock. Analysts’ average target price of $20.29 shows an increase of 6.3% in a year.

The low-cost carrier has struggled in recent years due to rising costs and lower passenger fare rates. JetBlue Airways made a strong comeback in late 2018, reporting strong growth in revenue per available seat mile (or RASM) and a 56% YoY jump in fourth-quarter 2018 EPS.

However, the airline’s latest first-quarter 2019 results were not impressive, as EPS plunged ~41% YoY. Moreover, RASM (also known as unit revenue), fell 3.2% YoY to 11.67 cents.

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Peer ratings

Analysts have a different view on major US airlines. They have provided a “buy” recommendation for most air carriers and project significant upside potential in their stock price over the next year.

Approximately 71% of the 21 analysts surveyed have given a “strong buy” or “buy” recommendation on Delta Air Lines (DAL), while the remaining 29% have a “hold” rating on the stock. Their target price of $66.37 depicts a return of 20.9%.

Nearly 67% of the 21 analysts tracking American Airlines (AAL) have provided the stock a “strong buy” or “buy” recommendation, about 29% gave a “hold” recommendation, and the remaining 5% recommended a “sell.” Their consensus target price of $40.61 shows an upside potential of 32.8% in the next year.

For Spirit Airlines (SAVE), about 72% of 18 analysts have a “strong buy” or “buy” recommendation, while the remaining 28% have provided a “hold” rating. The target price of $67.31 signifies a gain of 35.5% in the next year.

Investors can invest in the US Global Jets ETF (JETS) to gain exposure in the airline industry. The ETF’s portfolio comprises passenger and cargo airlines, aircraft manufacturer, airport, and terminal services providing stocks. The ETF has gained 6.2% this year so far.

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