JBLU Leapfrogs Off Fourth-Quarter Revenue Beat

The shares have been middling since a late-November bull gap

Deputy Editor
Jan 28, 2021 at 10:19 AM
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To say it's been an unusual time for the airline sector would be an understatement, and this round of earnings, in particular, is giving investors an idea of the temperature of the flight space. One sector member receiving generally positive response this morning is JetBlue Airways Corporation (NASDAQ:JBLU). The stock was surging in pre-market trading, and is now up 2.9% at $15.10, after the company posted fourth-quarter losses that were slimmer than analysts' estimates, and revenue that beat expectations. The company added that it expects more softness during the current quarter, though its cash burn improved significantly, coming in on the lower end of its $6 to $8 million guidance range at $6.7 million. 

A deeper look at JBLU's price performance shows the stock has been middling for the past few months, trading in a narrow channel between the $14 and $16 regions since an early November bear gap. While the equity remains smack dab in the middle of these two levels, support at the 60-day appears to be guiding the shares higher, keeping JBLU at a nine-month lead of over 50%. 

Analysts are still hesitant on JetBlue stock. Of the 13 in coverage, only four call it a "strong buy," compared to seven "hold" ratings and two "strong sells." What's more, the 12-month consensus price target of $15.53 is a slim 2.2% premium to last night's close. 

In the options pits, however, calls are king. In fact, in the past two weeks, 8.69 calls were picked up for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 87% of readings from the past year, suggesting long calls have rarely been more popular. 

Today's options activity paints a similar picture. So far, 5,749 calls have crossed the tape -- triple the intraday average -- compared to just 440 puts. The February 18 call is the most popular, followed by the 16 call in the same series. 

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