JetBlue Airways Stock (JBLU): Should I Buy It Now?

By Amit Chowdhry ● September 30, 2020
  • Should you buy JetBlue Airways stock (NASDAQ: JBLU) now? Here is some information to help you decide.

JetBlue Airways Corporation (NASDAQ: JBLU) recently made headlines this week after it was announced JetBlue received loans from the U.S. Treasury and the airline company a partnership with Vault Health to make at-home COVID-19 tests widely available for customers with pending travel plans.

U.S. Treasury Closes Loans To 7 Major Airlines

On Tuesday, the U.S. Treasury closed loans to seven major airline companies that were hit hard by the COVID-19 pandemic. And the Treasury has been urging Congress for saving many airline jobs by extending billions of dollars in payroll assistance.

The seven carriers that received loans include JetBlue Airways, Alaska Airlines, American Airlines, Frontier Airlines, Hawaiian Airlines, SkyWest Airlines, and United Airlines.

Back in March, U.S. airlines had received $25 billion under the CARES Act — which was primarily in the form of grants to keep their employees on payroll.

Partnership With Vault Health

The at-home test option provides convenience to customers wanting peace of mind and those who must secure a negative COVID-19 test result before entering certain states and countries or in order to avoid certain mandatory quarantines. And Vault Health will handle all testing and provide JetBlue customers both discounts on their tests and a dedicated customer support phone line.

“We continue to hear from health officials that testing is incredibly important in the fight against the coronavirus, and we want to make sure our customers have options for testing, especially prior to travel,” said Joanna Geraghty, president and chief operating officer, JetBlue. “As more and more regions reopen, many are requiring test results to enter. Now with easier testing options, those safety requirements may not be a deterrent for travel, but rather provide greater public health and peace of mind with little inconvenience.”

The at-home saliva test is administered through an online video connection via Vault Health with a test supervisor who ensures the customer is providing their sample properly. And the sample is then overnighted to a laboratory which processes and analyzes the specimen and results are provided in 72 hours or less.

“We are so happy to be able to provide JetBlue customers peace of mind during their travels,” explained Jason Feldman, founder and chief executive officer, Vault Health. “This saliva test is one of the most reliable and accurate COVID tests available in the country with fast turnaround time to results.”

JetBlue Airways Stock (JBLU): Should I Buy It Now?

Back in February, the stock price of JetBlue was trading at above $21 and more recently it has been trading at between $11 and $13. Due to the drop in travel, JetBlue reported revenue of $215 million for the quarter ended June 2020 compared to $1.59 billion a year earlier.

Should you buy JetBlue stock? Here is some pertinent information to help you decide whether to buy JetBlue Airways stock:

Price Target Activity

This is some of the recent price target activity:

9/8/20 – Morgan Stanley initiated coverage with an Overweight rating and a $16 price target

7/29/20 – Stifel Nicolaus boosted the price target of JetBlue from $11 to $12 with a hold rating

6/29/20 – Goldman Sachs increased its price target from $12 to $17 and upgraded its rating to a buy

I also checked out some consensus reports to see what they said about JetBlue Airways stock:

Consensus Report #1: 0 say strong buy; 5 say buy; 10 say neutral; 1 says sell; 1 says strong sell.

Consensus Report #2: 5 say buy; 7 say hold; 1 says sell

JetBlue Airways Stock (JBLU) Performance:

Here is how the JetBlue Airways stock price performed over certain periods of time:

1-Day: -4.44%

5-Day: -3.2%

1-Month: -4.6%

6-Month: +17.1%

YTD: -39%

1-Year: -32%

2-Year: -41%

5-Year: -54.7%

Since 2002 IPO: -0.87%

Based on the stock performance, price target activity, and analyst consensus report, I am going to hold off on adding more JetBlue stock to my portfolio and invest money in faster-growing stocks until I see more of a recovery from the company and buying this stock does not fit with my current financial strategy. Some investors may see the current stock price as a buying opportunity while others may be concerned about the future of JetBlue.

Disclosure: I wrote this article myself and I do not have any business relationship with any company whose stock I write about. I am not a financial advisor and all articles are my opinion. You should do your own due diligence and consider talking to a financial professional before investing.