JetBlue Airways' 3Q15 Earnings: A Hit or a Miss?

(Continued from Prior Part)

Analyst estimates

Following JetBlue’s 3Q15 earnings release, analysts’ consensus 4Q15 estimate remains almost unchanged. Sales are expected to a grow by 9.5% at $1,583 million. The consensus earnings per share (or EPS) are expected to grow by 91% to $0.50.

For 2015, analysts estimate that sales will increase by 10% to $6,397 million while EBITDA is expected to grow by 84% to $1,542 million. EPS is expected to rise by ~173% to $1.91.

Analysts are expecting JBLU to maintain sales growth at 9% for 2016 and 2017. However, the growth in profitability is expected to slow going forward. For 2016, analysts are expecting EPS to increase by 15% to $2.19 on 13% EBITDA growth. For 2017, EBITDA is expected to grow by 6% and EPS by 9% to $2.39.

Analyst recommendations

Of the 16 analysts rating the stock, 37.5% (six analysts) have a “buy” rating, 56.3% (nine analysts) have a “hold” rating, and 6.3% (one analyst) has a “sell” rating.

Target price

The stock’s consensus-12-month target price has reduced from $29.55 to $29.21, which indicates a 17% return potential versus a 20% return potential earlier. Analysts’ 12-month target prices for JBLU’s peers are as follows:

• American Airlines (AAL) $81.07 with 35% return potential

• United Airlines (UAL) $53.69 with 17% return potential

• Delta Air Lines (DAL) $60.93 with 21% return potential

• Southwest Airlines (LUV) $52 with 13.5% return potential

• Spirit Airlines (AAL) $55.27 with 49% return potential

• Alaska Airlines (ALK) $87.75 with 16% return potential

JBLU forms ~1% of the iShares S&P Mid-Cap 400 Growth ETF (IJK). Next, we wrap up this series by looking at JBLU’s valuation compared to peers.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - JetBlue Records Strong 3Q15 Performance: A Closer Look

• Part 2 - Can JetBlue Continue to Grow Its Capacity Profitably?

• Part 3 - JetBlue’s 3Q15 Performance: Must-Know Factors