U.S. Markets open in 4 hrs 45 mins

JetBlue Shares Decline More Than 4% on Q3 RASM View Cut

Zacks Equity Research

JetBlue Airways Corporation JBLU has provided a bearish forecast for third-quarter unit revenues, following which its shares declined more than 4% at the close of business on Sep 4. This marks the carrier’s biggest decline in the past five months.

In an 8-k filing, the carrier revised its guidance for third-quarter revenue per available seat mile (RASM). It now anticipates RASM to either slide up to 2% or remain flat year over year. Previously, the metric was estimated to increase in the 0.5-3.5% range. The downside is due to 1.25 points negativity from low bookings to Puerto Rico, 0.75 points adversity each from Hurricane Dorian and challenges in Punta Cana as well as a 1-point headwind from lower-than-expected demand across its system.

As JetBlue struggles with low demand trends, its fellow airline players seem quite optimistic about the overall outlook. Evidently, at the Cowen and Company 12th Annual Global Transportation Conference held on Sep 4, Delta Air Lines DAL and United Airlines UAL have furnished a positive outlook for the third quarter as well as the full year.

JetBlue Airways Corporation Price

 

JetBlue Airways Corporation Price

JetBlue Airways Corporation price | JetBlue Airways Corporation Quote

 
On the back of strong demand and rising revenues, Delta is hopeful about achieving its third-quarter earnings and revenue targets. Additionally, the carrier is confident about registering 6-7% top-line growth and a 25% surge in earnings per share in 2019, besides generating solid margins.

Meanwhile, United Airlines expects third-quarter passenger unit revenues to be near the mid-point of the guided range of an increase between 0.5% and 2.5% despite a 50-basis points’ negative impact from a soft demand scenario in China including Hong Kong. Additionally, the company maintains its expectations for current-quarter adjusted pre-tax margin in the 10-12% range.

Zacks Rank & Another Key Pick

JetBlue carries a Zacks Rank #2 (Buy). Another stock worth considering in the same space is Copa Holdings, S.A. CPA, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Copa have surged more than 32% in a year’s time.

It’s Illegal in 42 States, But Investors Will Make Billions Legally

In addition to the companies you read about above, today you get details on the newly-legalized industry that’s tapping into a “habit” that Americans spend an estimated $150 billion on every year.

That’s twice as much as they spend on marijuana, legally or otherwise.

Zacks special report revealing how investors can profit from this new opportunity. As more states legalize this activity, the industry could expand by as much as 15X. Zacks’ has just released a Special Report revealing 5 top stocks to watch in this space.

See these 5 “sin stocks” now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research