Jim Cramer Recommends Steering Clear of JetBlue and Other Airline Investments
- September 15, 2024
- Posted by: Regent Harbor Team
- Category: Finance
Contents
Jim Cramer’s Exclusive Stock Picks: Where Does JetBlue Stand?
Hey there, fellow stock market enthusiasts! You ever caught a typical New Yorker yakking about the bustling market? If not, fasten your seatbelts. Let’s dive into Jim Cramer’s Mad Money episode and see where JetBlue Airways (NASDAQ:JBLU) stands among his top picks.
The Market Madness Unraveled
The Frenzy of Stock Movements
Now listen up. Cramer is fed up with analysts justifying stock movements every trading session, acting like they’ve got Wall Street’s crystal ball. He’s right. Nobody can predict the market’s erratic nature, not even the ones who trade for a living. Remember that day? The Dow rose by 125 points, the S&P increased by 1.07%, and the NASDAQ jumped 2.17%. But these gains? Just different market perspectives clashing. One stays, one falls, and repeat the circus next morning.
Cramer’s Market Outlook: Baloney!
Cramer highlighted an average day filled with crucial yet not groundbreaking Consumer Price Index (CPI) figures, right before a Federal Reserve rate cut. Inline CPI readings meant no surprises. Still, stock futures dipped, and when the market opened, stocks fell too, leaving commentators scratching their heads. They blamed the slide on possible disappointment over a quarter-point rate cut instead of a half-point. Cramer called this baloney.
“Only one vision can hold up before it all starts over again the next morning. Today, like many days, we got a somewhat crucial set of figures from the government. This time it was for the Consumer Price Index. Notice I said ‘somewhat’ crucial because we’re now just days away from the Federal Open Market Committee meeting, where we’re likely to get a rate cut. Any session between now and then could be an outlier that might alter the Fed’s core mindset.”
Rate Cuts and Housing Boom
Right after chatting with Doug Yearley, CEO of Toll Brothers, who had a sunny outlook on housing due to rate cuts, Cramer was flabbergasted by the market’s drop. He believed rate cuts could kindle a housing boom, benefiting the broader economy. He predicted the averages might close higher. But, spoiler alert, they didn’t.
Check out his full interview here
“Now, I was aghast. Can I just say? I was aghast at this wholesale license of the truth. I had just come from an interview with Doug Yearley on Squawk on the Street. He told me the business had gotten very strong in August and September and could only get stronger as rates fell. Doug is a straight shooter, not a lot of fluff, but he basically said, ‘Look out if rates go down from here.’”
Calling Out the Nonsense
Here’s the kicker: Cramer wasn’t buying the excuse that the market nosedived due to CPI disappointments. He ridiculed sellers for missing the plot and not grasping the power of rate cuts. He didn’t mince words calling them clueless. His stance? No masks, no sugarcoating.
“I predicted that the average could actually finish up but it didn’t happen. I refused to dignify the musings of commentators who clung to the fiction that bulls were disappointed by the CPI reading. I knew the early action was just nonsense. Furthermore, I knew the sellers were wrong.”
Digging into JetBlue Airways (NASDAQ:JBLU)
Number of Hedge Fund Investors: 19
So, where does JetBlue Airways Corporation (NASDAQ:JBLU) fit in here? A bunch of viewers asked Cramer about it. His response? Crystal clear: he’s stayed clear of airline stocks since 1984. He vividly advised finding better fish in the investment sea.
“Here’s my feeling on JetBlue Airways Corporation and on airlines. I haven’t bought an airline stock, other than for my father, since 1984, and it was an immediate mistake. I learned my lesson: don’t touch the airlines. There are a lot of better stocks out there; you don’t need to be in airlines.”
JetBlue’s Financial Snapshot
Despite facing headwinds, JetBlue reported a net income of $25 million in Q2 2024, surpassing earnings expectations, even though revenue dipped 7% to $2.43 billion. Earnings per share hit $0.08, beating predictions. Looking forward? Lower fuel prices should trim operating costs, boosting profit margins. Yes, demand for travel has eased, but JetBlue’s wide network still benefits from strong travel interest. They’re set to grow revenue by an average 5.4% annually over the next three years.
| Metric | Q2 2024 |
|---|---|
| Net Income | $25 million |
| Revenue | $2.43 billion |
| Earnings Per Share | $0.08 |
Cramer’s Ranking
Overall, JetBlue lands 9th on Cramer’s stocks to watch list. While it’s got potential, we believe AI stocks promise higher returns quicker. For a solid AI investment, see our take on the cheapest AI stock out there—trading at less than five times its earnings.
Our Take on Stock Picks
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Still itching for more stock insights? Dive deeper into our analysis and upcoming opportunities.
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Disclosure: None. Originally published at Insider Monkey.
