Solid Balance Sheet Aids JetBlue (JBLU), Rising Costs Ail

Zacks Equity Research
2 min read
0
In this article:

We have recently updated a report on JetBlue Airways Corporation JBLU.

The stock has gained 37% in the past year compared with 34.6% rally of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Air-travel demand is improving gradually as more and more people take to the skies, following widespread vaccination programs. Passenger revenues (which contributed bulk to the top line) increased 22.4% to $2,058 million in the first half of 2021. Load factor (percentage of seats filled by passengers) increased 8.3 percentage points to 73.1% in the said period.

JetBlue’s liquidity position is impressive. The carrier exited the second quarter with cash and cash equivalents of $3,726 million, higher than its current debt level of $432 million. This implies that the company has enough cash to meet its short-term debt obligations. Its total debt to total capital ratio was 0.54 at the end of second-quarter 2021, lower than the previous quarter’s 0.58. Lower debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is declining and so is the risk of insolvency.

However, rising fuel prices have the potential to hurt JetBlue’s already weak bottom line. Aircraft fuel and related taxes skyrocketed 1,052% to $336 million in the second quarter of 2021. Average fuel cost per gallon rose 5.8% to $1.84 in the first half of 2021. Sequentially, the metric surged 98.8% to $1.91. The metric in the September quarter is estimated to be $2.09.

Zacks Rank & Stocks to Consider

JetBlue currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Landstar System, Inc. LSTR and Herc Holdings Inc. HRI. Knight-Swift and Landstar carry a Zacks Rank #2 (Buy), while Herc Holdings sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Landstar and Herc Holdings is pegged at 15%, 12% and 49.2%, respectively.


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

JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report

Landstar System, Inc. (LSTR) : Free Stock Analysis Report

Herc Holdings Inc. (HRI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Advertisement

Recommended Stories

  • Dow Jones Falls As Donald Trump Stock Craters; Cathie Wood Buys This Stock Amid 51% Plunge

    The Dow Jones fell as Elon Musk made a Tesla move. The Donald Trump stock sank on the stock market today. Cathie Wood bought a diving stock.

  • Trump Media stock tanks on move to issue millions of shares

    Trump Media stock slid as much as 16% on Monday after the parent company of Donald Trump's social media platform, Truth Social, filed to issue more than 21 million shares.

  • Wall Street Selloff Goes Global Amid US Rate Angst: Markets Wrap

    (Bloomberg) -- A selloff on Wall Street went global as investors grappled with the threat of higher-for-longer interest rates, China’s sluggish economy and an Israeli counter-strike. Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROIIran’s Attack on Israel Sparks Race to Avert a Full-Blown WarApple Faces Worst iPhone Slump Since Covid as Rivals RiseIsrael Versus Iran — What All-Out War Could Look LikeTesla Executive Baglino Leaves as Musk Lose

  • 4 Oversold Stocks to Buy Right Now

    Here are four stocks to buy now that could offer investors upside in the short and long term.

  • Nvidia Reveals 8 'Secrets' For When To Sell Stocks. No. 2 Is Key.

    As top growth stocks like Nvidia test key moving averages, keep in mind these proven rules for when to sell stocks.

  • Tesla layoffs hit high performers, some departments slashed, sources say

    Tesla management told employees Monday that the recent layoffs -- which gutted some departments by 20% and even hit high performers -- were largely due to poor financial performance, a source familiar with the matter told TechCrunch. The layoffs were announced to staff just a week before Tesla is scheduled to report its first-quarter earnings. The move comes as Tesla has seen its profit margin narrow over the past several quarters, the result of an EV price war that has persisted for at least a year.

  • Elon Musk Agrees With Jamie Dimon's Warning Of Political Polarization 'Creating Risks That Could Eclipse Anything Since World War II'

    JP Morgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon's annual shareholder letter is a moment investors await to understand the thinking of one of the world's most influential bankers. While there has been speculation of Dimon entering politics, with him even gaining the support of billionaire hedge fund manager Bill Ackman to run for president, JP Morgan shared in a statement that "Jamie has no plans to run for office" and that "he is very happy in his current role." That has not stopped him from oc

  • Not-So-Happy Meal: $20 Wages Has Burger Joints In This State All Heated

    California fast-food employees started earning a minimum of $20 an hour in April. Thanks to a new law, which went into effect earlier this month, California chain restaurants with at least 60 locations nationwide have to pay their employees more. For smaller restaurants, the minimum wage continues to be the statewide bottom of $16 an hour. The largest publicly-traded fast-food companies include McDonald’s Corp (NYSE:MCD); Starbucks Corp (NASDAQ:SBUX); Yum! Brands, Inc. (NYSE:YUM), which owns Tac

  • Trump Media tumbles 18% after taking the first step towards unlocking early insider stock sales

    The Truth Social parent company has filed to allow insiders, such as former president Donald Trump, to sell their stake in the company.

  • Xiaomi’s Success Means More Trouble for Battered China EV Stocks

    (Bloomberg) -- Xiaomi Corp.’s roaring entry into the electric vehicle market is dimming the recovery outlook for China’s beaten down auto startups.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROIIran’s Attack on Israel Sparks Race to Avert a Full-Blown WarApple Faces Worst iPhone Slump Since Covid as Rivals RiseIsrael Versus Iran — What All-Out War Could Look LikeTesla Executive Baglino Leaves as Musk Loses Another Top DeputyHype around the