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JetBlue and US Airways hit New Lows

May 31 2008

JetBlue and US Airways hit New Lows

    On a day that saw Regional Airlines decline as an industry 1.48%, several carriers saw brand new 52 week lows. Jet Blue (JBLU) decreased 4.34% on the day as the airline continued to find new selling pressure with additional reductions in earnings and high oil prices destroying a chance for profitability. Over the past year, Jet Blue has fallen 62.9% but with a current price to earnings ratio of 24 and no earnings in sight, the stock could continue to fall.

    US Airways (LCC) saw an even worse sell off as the company’s merger with United was called off. The stocked dropped 8.33% on the day. Analysts expect the company to lose 8.65 on the year and 8.69 next year. These expectations are down from a 1.03 gain expected 90 days ago and a 2.00 gain expected in the same period respectively. The stock has fallen 89% over the past year and doesn’t have as much room as Jet Blue on the downside. This Major Airline bucked its industries trend on a day that saw other Majors rise 1% on average.

    Watch for the stocks of the airlines to rally if oil falls quickly in the next several weeks. If oil remains above 125, the airlines should continue to decline as their time outside of bankruptcy is limited at these levels of fuel costs. (This is neither a buy or a sell recommendation)

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