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Tuesday, JetBlue Airways (NASDAQ:JBLU) received a reaffirmed Sell rating from Goldman Sachs, with a steady price target of $3.00. According to InvestingPro data, the airline currently operates with a significant debt burden, with a debt-to-equity ratio of 3.46x, while trading at a modest 0.55x price-to-book ratio. Goldman Sachs analysts highlighted that JetBlue’s adjusted loss per share for the March quarter was ($0.59), surpassing the FactSet consensus and Goldman Sachs’ estimate of ($0.63) and ($0.68), respectively. This outperformance was attributed to higher-than-anticipated unit revenue, unit costs, and non-operating expense. With a market capitalization of $1.44 billion and trailing twelve-month revenue of $9.28 billion, InvestingPro analysis reveals concerning cash burn rates and profitability challenges. Unlock 12 more exclusive ProTips and comprehensive financial metrics with InvestingPro.
JetBlue is anticipated to be the only airline within Goldman Sachs’ coverage to match its initial March quarter revenue per available seat mile (RASM) guidance. The airline has issued guidance for the June quarter, expecting RASM to decline by 3.5% to 7.5% year-over-year. This forecast is less favorable than the consensus estimate, which predicts a decline of approximately 0.5%, and Goldman Sachs’ own projection of a 0.2% increase.
The airline also provided cost per available seat mile (CASM) excluding fuel for the June quarter, projecting an increase of 6.5% to 8.5% year-over-year with a capacity reduction of 0.5% to 3.5%. This guidance is slightly above the consensus forecast, which anticipates CASM excluding fuel to rise by 6.4% on essentially flat capacity.
In light of the current macroeconomic uncertainty and its impact on consumer demand, JetBlue has decided to suspend most of its financial outlook for the fiscal year 2025, which was originally introduced in January. Nevertheless, the company has reiterated its expected 2025 interest expense of $600 million and has revised its capital expenditure forecast downward to $1.3 billion from the previously estimated $1.4 billion. The airline’s EBITDA stands at $490 million for the last twelve months, while analysts maintain a cautious stance, as revealed in the detailed InvestingPro Research Report, available along with comprehensive analysis of 1,400+ US stocks.
In other recent news, JetBlue Airways Corporation has seen a revision in its rating outlook by Fitch Ratings from Stable to Negative, while maintaining its Long-Term Issuer Default Rating at ’B’. This change reflects anticipated challenges due to a dip in domestic leisure travel demand, which could strain JetBlue’s margins. Additionally, Fitch projects JetBlue’s free cash flow to remain significantly negative in the near term, with potential improvement by 2027. Meanwhile, JetBlue has expanded its TrueBlue loyalty program through a partnership with Japan Airlines, allowing members to redeem points for flights across Japan and East Asia. This marks the first time TrueBlue points can be used with an East Asian airline partner, enhancing travel options for members. Furthermore, JetBlue has appointed Daniel Blake as Vice President of Airports Experience and Edward Pouthier as Vice President of Loyalty & Personalization to strengthen its leadership. Lastly, JetBlue has adjusted its capacity forecast for the first quarter of 2025 due to weather-related disruptions and fluctuating demand, reducing its capital expenditure forecast significantly below analyst expectations.
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