JetBlue stock tumbled by 10% in the regular session on Monday and then bounced back by over 7% in the extended hours as investors reacted to its earnings report. JBLU hit a record low of $2.33, down by over 64% from the year-to-date high. Its market capitalization has slumped from over $2.4 billion to $894 million today.
JetBlue stock rebounded as company hints at improving margins
JBLU stock bounced back after the company published a mixed earnings report, which showed that its revenue rose by 21.1% to $2.8 billion. This rally happened as the company boosted its prices to deal with the rising jet fuel prices. These fuel prices pushed the operating expense per available seat mile (CASM) by 19.4% from the same period last year.
The company said that the average fuel price during the quarter was $3.91 per gallon, 57% from a year earlier. Sadly, this surge will likely continue now that crude oil pricesare rising, with Brent hitting $117 on Friday. Oil prices will likely continue rising after the midterm elections since Trump has suggested that he will attack Iran in a bid to force a deal.
The stock is rising as investors react to its margins, which the management expects will improve in the foreseeable future. In a statement, the CEO said:
“We expect further margin expansion in the fourth quarter despite fuel prices forecasted to be 85% higher than in the same period last year. This is a testament to the compounding benefits of our JetForward strategy, which is improving our revenues and costs as we head into 2027.”
The margin statement comes at a time when the company’s cost of borrowing continues rising, with its bonds yielding over 30%. As a result, some of its creditors have started talking with advisors as they fear of difficulties in paying its debt. The company ended the quarter with over $15.9 billion in assets, $1.25 billion in cash and equivalents, and $8.393 billion in debt.
These fears explain why investors have taken short positions on the company. It has a short interest of 25.9%, a sign that many of them expect it to drop further.
JetBlue share price technical analysis
The daily chart shows that the JBLU stock has faced substantial headwinds, moving from a high of $6.50 in August to a low of $2.3. It tumbled below the important support level of $3.90, its lowest level in June and October 2025. It was also its lowest level in March this year.
JetBlue stock formed a death cross pattern on September 10, confirming the bearish outlook. The Relative Strength Index (RSI) has plunged to the oversold level of 13. Therefore, the most likely scenario is where the stock has a dead cat bounce, possibly to $3 and then resume the downward trend.