Skip to main content

Market Overview

Here's What Grounded JetBlue's Rating At Buckingham

Here's What Grounded JetBlue's Rating At Buckingham

Analysts at Buckingham Research Group no longer hold a bullish rating on JetBlue Airways Corporation (NASDAQ: JBLU) due to the ongoing negotiations between pilots and management and competitive concerns. Daniel McKenzie downgraded JetBlue's stock from Buy to Neutral with a price target lowered from $28 to $24.

JetBlue's pilots are requesting mediation from the National Mediation Board to assist in an ongoing contract negotiation that dates back to 2014, Aviation Tribune reported. The pilots are asking for a contract which includes market-rate compensation, but management's proposal implies limited pay increases which would make the firm's pilots among the least paid.

A new satisfactory pilot contract would likely force nonfuel CASM (cost per available seat mile) higher than what the Street is modeling in 2018, according to McKenzie. This would also occur at the same time legacy airlines are "becoming more assertive" and enter JetBlue's key growth markets including Boston and the Miami area.

As such, multiple expansion in the stock in the next year is "unlikely," the analyst added. But investors who can wait up to three years could see upside in the stock as high as $35 per share, which would imply a 14x multiple on an EPS of $2.50. By comparison, the stock is now trading at an 11.4x multiple on the analyst's 2018 estimates, which implies "close to full valuation" for the time being.

Bottom line, JetBlue's stock has limited upside, but its valuation is unlikely to contract given the potential for revenue upside from the rollout of MINT and fare families and also from commercial initiatives.

Related Links:

Should You Buy The Airline Stocks On An Earnings Dip?

Airline Sector In Focus As Qatar Airways Wants To Invest In American Airlines

Latest Ratings for JBLU

Feb 2021Deutsche BankUpgradesHoldBuy
Jan 2021Morgan StanleyMaintainsOverweight
Jan 2021Vertical GroupDowngradesBuyHold

View More Analyst Ratings for JBLU
View the Latest Analyst Ratings


Related Articles (JBLU)

View Comments and Join the Discussion!

Posted-In: Airliners Daniel McKenzie Pilot Salary pilotsAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

IRIXRoth CapitalMaintains9.0
AMRSRoth CapitalMaintains33.0
VORBarclaysInitiates Coverage On56.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at