Here’s What To Expect From JetBlue’s Q2

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JetBlue Airways

JetBlue Airways (NASDAQ: JBLU) will report its Q2 2023 results on Tuesday, Aug 1. We expect the company’s revenues to come in at $2.6 billion, aligning with the consensus estimate. This would mark year-over-year growth of about 7%. Earnings will likely come in at about $0.42 on a per-share and adjusted basis, slightly below the $0.44 consensus estimate. See our interactive dashboard analysis on JetBlue Airways Earnings Preview for more details on how the company’s revenues and earnings will likely trend for the quarter. So, what are some of the trends that are likely to drive JetBlue Airways’ results?

The company will likely continue to benefit from the robust travel demand. It should see a continued rise in total available seat miles (ASM), and the passenger load factor will likely remain strong. However, it will be a tough comparison with the prior-year quarter, which saw a record travel demand. The average ticket price has also cooled this year while overall capacity has expanded. Looking at Q1 2023, JetBlue Airways’ revenues were up 34%, led by a 9% rise in capacity and a 25% rise in average revenue per available seat mile to 13.88 cents.

Looking at the bottom line, JetBlue Airways reported a $0.34 loss per share on an adjusted basis in Q1, compared to a $0.80 loss per share in the prior-year quarter. The company’s average fuel price per gallon stood at $3.50 in Q1, and it should be lower in Q2 vs. its prior-year figure of $4.24. The average U.S. Gulf Coast Kerosene Jet fuel price per gallon fell from $3.90 (end of June last year) to $2.60 now. Now that fuel prices have cooled compared to last year, the company will likely see its operating margin expand. After seeing a sharp decline from 9.5% in 2019 to -63.2% in 2020 due to the impact of the pandemic, JetBlue Airways’ operating margin has recovered to -4.2% in 2022. Our JetBlue Airways’ Operating Income Comparison dashboard has more details.

Looking at JBLU’s stock price, we believe it is appropriately priced. We estimate JetBlue Airways’ valuation to be $8 per share, aligning with the current market price. Our forecast is based on an 11x P/E multiple for JBLU and expected earnings of $0.75 on a per-share and adjusted basis for the full-year 2023. The company has guided for adjusted EPS to be in the range of $0.70 to $1.00 for the full-year 2023. The company expects its fuel costs to be lower for the year, implying margin expansion in the coming quarters.

While JetBlue Airways’ stock looks fully valued, check out how JetBlue Airways Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a portfolio that aims for long-term growth? Here’s a value portfolio that’s done much better than the market since 2016.

Returns Jul 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 JBLU Return -11% 21% -65%
 S&P 500 Return 3% 19% 105%
 Trefis Multi-Strategy Portfolio 7% 28% 310%

[1] Month-to-date and year-to-date as of 7/31/2023
[2] Cumulative total returns since the end of 2016

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