Investors who bought stocks during the Covid-19 market crash in 2020 have generally experienced some big gains in the past two years. But there is no question some big-name stocks performed better than others since the pandemic bottom.
JetBlue's Bumpy Ride: One company that has been a lackluster investment in the past two years has been airline stock JetBlue Airways Corporation (NASDAQ:JBLU).
JetBlue and other travel stocks experienced a near worst-case scenario when the COVID-19 breakout occurred in early 2020.
Travel demand fell to nearly 0% during the worst of the pandemic. JetBlue’s long-term debt also ballooned from $1.9 billion in 2019 to $4 billion in 2020.
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At the beginning of 2020, JetBlue shares were trading at $18.90. By the beginning of March, the stock had dropped to $15.82 after news of the virus spreading in China prompted concerns about a U.S. pandemic.
On March 16, JetBlue shares dropped below $10. The stock ultimately bottomed at $6.61 on March 23, the same day the S&P 500 hit its pandemic low. On March 27, airlines received $25 billion in federal bailouts.
Airlines got another $15 billion in government bailouts in December. By that time, vaccine optimism had boosted JetBlue’s share price back up to above $15.
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JetBlue In 2022, Beyond: Vaccine rollouts in early 2021 had airline stock investors confident about a recovery of the industry in the second half of the year. In April 2021, JetBlue shares briefly surpassed their 2020 pre-pandemic highs, climbing as high as $21.96.
Unfortunately, while air travel has recovered, JetBlue has struggled with a number of company-specific issues in recent quarters beyond the pandemic. In the second quarter of 2022, JetBlue dealt with a combination of overly aggressive scheduling, bad weather and staffing constraints.
As a result, nearly half of the airline's flights in the month of April were canceled or delayed. JetBlue also seems to have overreacted to the problems by aggressively cutting its flight schedule for the remainder of 2022. Poor unit economics, reduced capacity and surging fuel prices have prevented JetBlue from returning to profitability following the pandemic. In addition, some investors are concerned about the additional debt JetBlue is taking on to acquire Spirit Airlines Incorporated (NYSE:SAVE) for $3.8 billion.
As a result of all its recent problems, JetBlue shares have now traded all the way back down to $6.84.
Read: JetBlue Locks Deal With Spirit To Create Low-Fare Challenger
At this point, investors who bought JetBlue on the day it hit its pandemic low and held on have generated a negative overall return on their investment. In fact, $1,000 in JetBlue stock bought on March 23, 2020, would be worth about $996 today.
Looking ahead, analysts are expecting JetBlue stock to rebound in the next 12 months. The average price target among the 10 analysts covering the stock is $9.75, suggesting 42.5% upside from current levels.
