This Airline Stock Is Near A Buy Point As Revenue Outlooks Improve

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JetBlue ( JBLU ) on Tuesday raised its fourth-quarter unit revenue outlook, and the carrier said the financial fallout from this summer's string of hurricanes wouldn't be as bad for the quarter as once expected.

[ibd-display-video id=2881825 width=50 float=left autostart=true] The stronger outlook follows similar forecasts last week from United Airlines ( UAL ) and Southwest ( LUV ), as travel demand remains solid and gives airlines more leeway to charge more. Delta Air Lines' ( DAL ) stock also got a lift last week after the airline reported November traffic figures.

JetBlue said it expected fourth-quarter unit revenue, which tallies sales in relation to overall capacity of available seats and flight coverage, to come within a range of down 0.5% to up 1.5%. The carrier initially expected Q4 unit revenue to be anywhere from flat to down 3%.

The company said it expected the impact from the hurricanes - in particular Irma and Maria - to take 0.5% off fourth-quarter unit revenue. But that's better than prior expectations for one to two percentage points.

Shares of JetBlue closed down 2.7% at 21.59 in the stock market today , reversing an earlier gain of 1.7%, but still near a 22.46 buy point from a cup-with-handle base . Delta fell 1.4% to 53.62, back below a 54.16 buy point of a cup-with-handle base, and American Airlines ( AAL ) dropped 1.6% to 50.47, further below a 53.84 buy point of a cup-with-handle base. Southwest rose 0.2%, extended above buy range .

United lost 1.4% but is above its 50-day line as it tries to recover from the 12% drop suffered after management was unable to answer analysts' questions about 2018 financial forecasts , casting doubt on its ability to hit longer-term financial targets.

IBD'S TAKE:This summer, Wall Street fretted about the effect airfare discounting would have on airlines' profits. This fall, Wall Street hit them over rising costs. For more,read this story.

For November, JetBlue's passenger traffic increased 2.8%, while its flight capacity increased by 4.3%.

JetBlue on Thursday said it would add service to Worcester, Mass., by offering daily flights between that city and JFK International Airport starting in May. Introductory fares, which were available last week, started at $29 one way.

The move helps to strengthen JetBlue's position in Massachusetts, where it already flies a lot of planes in and out of Boston.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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