JetBlue raised its third-quarter revenue per available seat mile (RASM) growth forecast to 17%–20%, from 12.5%–16.5%, as demand held up despite higher fares. It also raised cost forecasts, and TD Cowen, Barclays, Goldman Sachs and UBS cut their price targets.
JetBlue now expects third-quarter nonfuel unit costs to rise 6%–8%, up from 2.5%–4.5%, and fuel to cost $3.96 per gallon, versus $3.49 previously. TD Cowen cut its target to $4 from $5 and kept Hold; Barclays lowered its target to $5 from $7 and kept Equal Weight. Goldman Sachs cut its target to $4 from $4.50 and maintained Sell; UBS lowered its target to $4 from $5 and maintained Sell.
July and August cancellations led JetBlue to cut its third-quarter capacity-growth guidance to 1.5%–3.5%, from 3%–6%. The company said severe U.S. airport weather days were 40% above the prior three-summer average, while Northeast air-traffic-control cancellations nearly doubled. JetBlue expects operating margins to improve by about 3.5 percentage points year over year in the second half and targets sustained operating profitability in 2027. Its longer-term plans include at least $310 million in incremental EBIT in 2026 and roughly $1.2 billion annually, plus at least $1 in EPS by 2028, assuming continued demand strength and $3-per-gallon jet fuel.
