Bearish Analysts Blast JetBlue Stock

However, call buyers have been flocking toward the stock

Managing Editor
Oct 24, 2018 at 9:27 AM
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JetBlue Airways Corporation (NASDAQ:JBLU) is 2% lower in electronic trading, after the stock received two price-target cuts overnight. The bear notes come roughly 24 hours after the company reported a drop in third-quarter profit -- though the results still beat the consensus estimate -- with Stifel and Imperial Capital lowering their respective price targets to $17 and $24.

JetBlue stock has been trending lower since its mid-March peak near $23. Underscoring this technical weakness, the shares yesterday hit a two-year low of $15.88, before closing at $16.63. Overall, JBLU has shed 26% year-to-date.

Against this backdrop, the majority of covering brokerages sport "hold" or "sell" ratings. However, the stock's average 12-month price target of $20.42 stands at a 22% upside to current levels, meaning more price-target cuts may be in the near future for the embattled travel stock.

In the options pits, calls have been bought to open over puts at a faster-than-usual clip. This is based on the stock's 10-day call/put volume ratio of 25.21 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 99th percentile of its 12-month range.

Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.29 stands in the low 8th annual percentile. This indicates that short-term speculators are more call-heavy than usual toward JBLU stock. 

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