Shares of JetBlue Airways Corporation (JBLU) gained 15.2% on Dec 7, closing the trading session at $5.45. The upside was owing to the favorable guidance provided by JetBlue for the fourth quarter and full year of 2023 due to improved travel demand and solid operational performance.

JetBlue has witnessed better-than-expected close-in bookings during both peak holiday and non-holiday travel periods since late October. Solid operational performance was also observed during the month of November. Notably, the record-breaking traffic during the Thanksgiving period has provided a much-needed boost to the airline stock after a few tough months due to headwinds like high labor and fuel costs and a slowdown in domestic air travel demand.

Given this encouraging backdrop, let’s take a detailed look at the updated financial guidance provided by JBLU for the fourth quarter and 2023.

Q4 Outlook

Available seat miles (ASMs or capacity) for the fourth quarter are now anticipated to increase in the 2-3% band (prior view: 0.5-3.5%). Total revenues are now expected to decrease in the range of 4-7% (prior view: decline in the range of 6.5-10.5%).

Average fuel cost per gallon in the December quarter is now estimated to be between $3.05 and $3.15 (prior view: $3.05-$3.20). JBLU now expects loss per share in the band of 25-35 cents. The previously provided guidance was a loss per share of 35-55 cents.

JBLU continues to expect the cost per available seat mile (CASM, excluding fuel and special items) to register growth of 8.5-10.5%.

2023 Outlook

ASMs or capacity for 2023 is now anticipated to increase in the 5.5-6.5% band (prior view: 5-7%). Total revenues are now expected to increase in the range of 4-5% (prior view: 3-5%).

Average fuel cost per gallon for 2023 is now estimated to be between $3.00 and $3.05 (prior view: $3.02-$3.07). JBLU now expects loss per share in the band of 40-50 cents. The previously provided guidance was a loss per share of 45-65 cents.

JBLU continues to expect CASM, excluding fuel and special items, to register growth of 4.5-5.5%.

Zacks Rank and Stocks to Consider

Currently, JetBlue carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks from the Zacks Transportation sector are Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation WAB and SkyWest, Inc. SKYW. Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wabtec has an expected earnings growth rate of 22.02% for the current year. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.

The Zacks Consensus Estimate for WAB’s current-year earnings has improved 5.1% over the past 90 days. Shares of WAB have gained 20.4% year to date.

SkyWest’s fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s current-year earnings has improved 31.5% over the past 90 days. Shares of SKYW have surged 191.9% year to date.

SKYW delivered a trailing four-quarter earnings surprise of 32.57%, on average.

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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: Investing Feed: JetBlue (JBLU) Stock Rallies 15.2% on Bullish Guidance