2 Downgraded Airlines Stocks to Avoid

NASDAQ: JBLU | JetBlue Airways Corporation News, Ratings, and Charts

JBLU – The airline industry has faced several operational challenges due to travel restrictions and other routine disruptions since the onset of the pandemic. Moreover, the staffing shortages are proving to be a significant challenge in the industry, compelling carriers to pare-back flying. Given the scenario, we think downgraded stocks JetBlue Airways (JBLU) and SkyWest (SKYW) might be best avoided.

The airline industry has been under pressure since the pandemic due to travel restrictions, while staffing shortages have made it difficult for airlines to recover from other routine issues. Flight delays and cancellations increased significantly last year, costing U.S. carriers more than $100 million, disrupting customers’ experience.

The industry is trying to get ahead of the problem with massive hiring, timely planning for bad weather, conservative scheduling, and better technology for customers and staff. However, similar risks might persist as the peak travel season gets underway. Carriers including Spirit Airlines, Inc (SAVE) and JetBlue Airways (JBLU) have already pared back flying this season. 

Given the ongoing disruptions in the airline industry, we think downgraded stocks, JetBlue Airways Corporation (JBLU) and SkyWest, Inc. (SKYW), might be best avoided.

JetBlue Airways Corporation (JBLU)

JBLU is a travel company that provides air transportation services through its segments, including Domestic, Caribbean, & Latin America. 

JBLU was recently downgraded by JPMorgan Chase & Co. analysts from an “overweight” rating to an “underweight” rating. Several other brokerages also downgraded the stock and revised their price targets.

In April, Spirit Airlines, Inc. announced that its Board of Directors is to begin a discussion regarding the JBLU’s proposal to acquire SAVE in an all-cash transaction for a $33.00 per share deal, implying a fully diluted equity value of $3.6 billion and providing full and certain value to Spirit shareholders. However, SAVE noted that there is no assurance that the discussions will result in a transaction.

For the fiscal first quarter ended March 31, 2022, JBLU’s operating expenses increased 104.8% year-over-year to $2.10 billion. Net loss for the period increased 3.2% from the prior-year quarter to $255 million, while its loss per share came in at $0.79, up 1.3% year-over-year.

The consensus EPS estimate is expected to come in at a negative of $0.09 for the fiscal second quarter ended June 2022, while the EPS estimate for the fiscal year ended December 2022 is at a negative $0.53.

The stock has declined 44.7% over the past year and 27.3% over the past nine months to close the last trading session at $11.01.

JBLU’s POWR Ratings reflect this bleak outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

JBLU has a Sentiment grade of F and a Growth and Stability grade of D. In the 31-stock, F-rated Airlines industry, it is ranked #21. Click here to see the additional POWR Ratings for JBLU (Momentum and Quality).

SkyWest, Inc. (SKYW)

SKYW operates a regional airline in the United States through its SkyWest Airlines; and SkyWest Leasing segments.

Raymond James downgraded shares of SKYW from an outperform rating to a market perform rating.

SKYW’s operating expenses increased 31.4% year-over-year to $71.60 million for the fiscal first quarter ended March 31, 2022. SKYW’s operating income decreased 35.6% year-over-year to $52.05 million. Net income came in at $17.73 million, down 50.6% from the previous-year quarter, while its EPS was $0.35, reflecting a year-over-year decrease of 50.7%.

Street EPS estimate for the fiscal second quarter ended June 2022 of $0.52 reflects a 57.4% year-over-year decrease, while its EPS is expected to decrease 74.2% from the year-ago value to $0.89 in the fiscal year ending December 2022.

The stock has declined 42.8% over the past year to close the last trading session at $29.15. It has slumped 32.3% over the past six months.

Under the POWR Ratings, SKYW has been accorded a D rating for Stability. It is ranked #3 in the Airlines industry.

To see the additional POWR Ratings for Value, Quality, Growth, Momentum, and Sentiment for SKYW, click here.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


JBLU shares were trading at $11.18 per share on Monday morning, up $0.17 (+1.54%). Year-to-date, JBLU has declined -21.49%, versus a -12.53% rise in the benchmark S&P 500 index during the same period.


About the Author: Komal Bhattar


Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
JBLUGet RatingGet RatingGet Rating
SKYWGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Investors: Are You “Fed Up”?

The post 12/18 Fed meeting sell off caught many by surprise as the S&P 500 (SPY) broke under 6,000 for the first time this December. What is happening? And why? And what comes next? Steve Reitmeister shares his view in the fresh article to follow...

3 Streaming Giants Ending the Year on a High Note

The video streaming industry is rapidly evolving, driven by technological advancements and a surge in on-demand content. In this ever-evolving dynamic industry, fundamentally robust streaming stocks Amazon (AMZN), Netflix (NFLX), and Disney (DIS) could be solid buys. Keep reading...

3 Gold Miners Glittering with High Upsides

With lingering market fluctuations, gold continues to glitter with its stable prospects. In this volatile landscape, investing in Barrick Gold (GOLD), Alamos Gold (AGI), and Kinross Gold (KGC) could provide some relief to investors and solidify their long-term profits. Read on…

3 Digital Entertainment Companies Capitalizing on Streaming Growth

The digital entertainment industry is rapidly evolving, with new innovations being introduced almost every day. In this ever-changing dynamic, fundamentally solid entertainment stocks Amazon (AMZN), Netflix (NFLX), and Roku (ROKU) could be solid buys. Keep reading...

Is the Stock Market in a Rolling Correction?

Are you impressed by the S&P 500 (SPY) staying above 6,000? You shouldn’t be because of the “rolling correction” taking place. Steve Reitmeister explains what that is...and how to trade this environment to stay on the right side of the action. Full story to follow...

Read More Stories

More JetBlue Airways Corporation (JBLU) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All JBLU News