JetBlue stock trading at $6, down 70% from 2021 highs, facing challenges, likely to struggle

From Nasdaq: 2024-07-08 23:08:24

JetBlue stock (JBLU) has seen a significant decline, trading at $6 per share, down 70% from its peak in March 2021. This underperformance is due to headwinds like high fuel prices and aircraft outages. Despite a slight recovery in early June, JBLU is now trading 30% below that level. With limited room for growth, JBLU may continue to struggle.

During the 2008 recession, JBLU’s stock declined by almost 60% but recovered post-crisis. In contrast, the S&P 500 fell by 51% but rebounded by 48%. JBLU has struggled to beat the S&P 500 in recent years, with negative returns in 2021, 2022, and 2023. Comparatively, the Trefis High Quality Portfolio has consistently outperformed the index.

JetBlue’s financials show an increase in revenue to $9.5 billion but also an expanded loss per share due to rising expenses. Total debt has increased to $5.7 billion while cash decreased to $1.6 billion. This, coupled with a high debt to equity ratio of 278%, poses a near-term risk. Despite potential gains post-inflation shock, JBLU faces challenges like high debt levels and operational issues.

Investors are cautious about JBLU’s future performance, given its high debt burden and limited growth potential. The company’s cash position, debt levels, and profitability will be key factors to monitor. The stock’s underperformance compared to the S&P 500 and its historical performance during crises highlight the challenges JetBlue faces in the current market environment.



Read more at Nasdaq: Will JetBlue Stock Rebound To Its 2021 Highs of Over $20?