If this is the year that airline stocks like United Continental Holdings (UAL), Delta Air Lines (DAL) and American Airlines (AAL) take off, JetBlue (JBLU) has been the exception that proves the rule.
While United Continental has gained 21% in 2014, Delta Airlines has risen 25%, Southwest Airlines (LUV) has advanced 27% and American Airlines has surged 48%, JetBlue has gained 4.6%.
But JetBlue’s stock is doing something that Delta Air Lines and the other carriers can’t do today: gain. Cowen’s Helane Becker and Conor Cunningham explain why:
JetBlue announced the sale of LiveTV to Thales for $400MM. We believe the $400MM purchase price appears fair, based on past revenue generation; however, if LiveTV ends up generating +$150MM in revenues as Thales (HO, NR) expects, we believe the price paid is low given LiveTVs comps. We believe JetBlue will use the proceeds from the sale of LiveTV for working capital and to fund aircraft deliveries…JetBlue is expected to take delivery of nine aircraft in 2014 and has a backlog of 136 aircraft with Airbus and Embraer. We also expect JetBlue CAPEX to trend lower for as the company had expected 2014 CAPEX of $75MM related to LiveTV.
Shares of JetBlue have gained 1.6% to $8.89 at 11:35 a.m. today, while United Continental Holdings has dropped 0.6% to $45.65, Delta Air Lines has fallen 1% to $34.15, American Airlines has declined 1.2% to $37.13 and Southwest Airlines is off 0.3% at $23.84.
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