Nobody likes JetBlue (JBLU), but that will change

From TheStockMasters

Poor JetBlue Airways Corporation (JBLU), anyone who didn’t see this coming since the Valentines disaster must have been blind or better yet, left on the runway for more than 12 hours at JFK. It was in February when a massive winter storm in New York City stranded thousands of JetBlue passengers. They released that customer’s bill of rights to make up for the crisis but it didn’t help the company stock.

• Last week JetBlue reported a $22 million loss for the quarter, down from $32 million the year before. They spent $65 million in cash and now they have a grand total debt of $2.9 billion. You would think they are selling tickets on layaway with those numbers? Available seat miles rose by 12% year over year, and revenue per seat mile was also up but that didn’t get Wall Street excited. In the last 3 months shares of JBLU have nose dived 30% and today they are crash landing near their 52-week low of $9.15 a share.

  Not to worry, the StockMasters are helping out with JetBlue’s new advertising campaign, here’s one that works for the airline as well as the company stock:
  
  The analysts covering JetBlue hate the stock, last week Calyon Securities downgraded them to Neutral and dropped the price target from $14 to $11 a share. Calyon was disappointed by their earnings and based on a higher cost guidance by the company without offsetting increases in revenues they are giving JetBlue the big thumbs down. They said fuel costs expectations have gone up about 9% – so what are they going to do?

  Nothing. JetBlue is going to keep on being JetBlue.

  I don’t know what it is about this stock or the company, but people can’t seem to stay away from JetBlue. We’ll revisit the company in six months, and I bet no matter how expensive jet fuel may be, as long as they don’t have another Valentine’s Day episode the stock will be up 5%. They do it every time. Maybe it’s the friendly service, the TV on every back of the seat, the trueBlue account, power jacks everywhere at the gate, cheap tickets,….who knows? But the stock always comes back every time it hits a low, so why should this time be any different?

  Look, I hate airlines stocks and I hate traveling with any airline, but if I can book a flight with them, I use JetBlue every time. The have a huge fan base and I know that’s not good enough to buy this stock. Truth be told, Jim Cramer has told us enough times to never buy airline stocks, and I agree. But just when you think JetBlue is done for and everyone’s had enough they manage to stay alive like American Idol (please tell me this is the last season). They’ve got a great CEO and as Forbes pointed out, American’s embrace and love JetBlue. If JetBlue can start branching out and making more flights to new destinations around the country – then sky’s the limit.

  So if CEO David Neelman can just hold it together for a few months without any bad news we may see some upside to JBLU shares.

  Dear Mr. Neelman,
  Please just do the basics, get the flights out on time, try that for starters. Maybe give away some free flights to the analysts that cover your stock and try not to crash any of your planes. If you guys can manage a smooth take-off, well then there’s no reason why you can’t make shareholders some decent money.

  Article written by: Frank Lara Jr.
  Article posted on: May 1st, 2007

  Disclaimer: The Author does not own any shares or hold any short/long positions in the securities mentioned in this publication.

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