Following a general trend of improvement among airline stocks, shares of airline JetBlue (NASDAQ:JBLU) have risen by more than 10 percent in the past five days. While the stock is still down nearly 25 percent in the past 12 months, the recent bump could indicate that JetBlue is finally regaining its momentum. Is JetBlue the best airline stock to buy now, or do the pressures that have pushed JBLU shares down over the last 12 months still make the stock a risky proposition?
JetBlue Loyalty Program Creating Value
One of the largest challenges JetBlue faces is the fact that its revenues have been trending generally downward since mid-2023.
Despite what would seem to be quite a few dark clouds around JetBlue’s performance in the last few years, Q3’s earnings report did offer some hope for shareholders. Although operating revenue still dropped 1.8 percent to $2.3 billion during the quarter, JetBlue was able to hold its operating expense per available seat mile almost perfectly in line with the year-ago quarter’s. Considering the fact that input costs are trending upward, this was a remarkably positive accomplishment for the airline.
Year-to-date, JetBlue has also been able to substantially reduce its net losses. For the nine months ending in Q3 of 2024, the airline lost $751 million. For the nine months reported so far in 2025, that loss has dropped to $425 million. On a per-share basis, this translates to a reduction in losses from $(2.18) to $(1.18).
Much of JetBlue’s future will likely depend on the success of the JetForward turnaround strategy it unveiled last year. Under the JetForward plan, JetBlue plans to simplify routing, increase efficiency and reduce operating costs in order to return the airline to profitability. To date, this program has been reasonably successful and is on track to deliver a target of $290 million worth of incremental EBIT by the end of the year.
JetBlue has also been focusing on its loyalty program as a method of creating value. In Q3, the airline began an agreement with United that allows for reciprocal accrual and redemption of loyalty points. Next year, JetBlue expects to launch domestic first-class flights, driving further value through premium pricing. The airline even plans to open two airport lounges in New York and Boston.
Cumulatively, the changes outlined above mark a transition at JetBlue from its traditionally low-cost model to a more standard airline experience. Though JetForward and other changes made at JetBlue recently have started to pay off, it remains to be seen whether the business can compete effectively with other major airlines as it moves out of the budget realm.
A final deeply positive point for JetBlue is its balance sheet, which currently boasts about $2.9 billion in liquidity. Of this, $2.4 billion is in cash and cash equivalents, up from $1.9 billion as of the end of last year. In the same period of time, total debt has also fallen modestly and is currently holding at about $8.5 billion. Though this is a fairly heavy debt load, JetBlue’s strong liquidity position will likely put it on firm financial ground as it executes its turnaround strategy.
JetBlue Trading At 0.8x Book Value
One of the most potentially interesting aspects of JetBlue is its low valuation. Right now, JBLU shares trade at just 0.2 times trailing 12-month revenues and 0.8 times book value, both of which are far below sector averages. For reference, United Airlines, a benchmark in the airline industry, trades at 0.6 times trailing revenue and 2.4 times book value. United, however, remains actively profitable despite the pressures on airlines, with a net income margin of 5.6 percent over the last 12 months.
Even with a very modest valuation, JetBlue still isn’t enticing analysts. Right now, analysts are rating JBLU as a hold, with the stock currently having nine hold ratings, four sell ratings and no buy ratings. Citi also recently dealt a blow to JetBlue when it initiated buy ratings on Delta, American and United but rated JetBlue as a sell. Though significantly more optimistic than Citi, Morgan Stanley also recently reduced its price target on JBLU from $8.00 to $7.00.
Speaking of analyst price forecasts, it’s also worth noting that JetBlue has already gone well above the average price target of $4.37. From its current price of $4.95, this target would imply a downside of almost 12 percent.
Is Now the Time to Buy JetBlue?
Although revenues are still declining and JetBlue is still losing money, it’s important to acknowledge the progress the business has made under its JetForward strategy. Lower net losses and hundreds of millions of dollars in incremental EBIT show that the strategy is paying off, even if JetBlue has yet to get itself back in the black. Improvements to the loyalty program and the introduction of first-class flights and airport lounges could help JetBlue to bolster its margins in the long run, though it’s still too early to say exactly how well these changes will pay off.
It’s also useful to take into account the positive trends that appear to be forming up behind the airline industry going into 2026. Across the board, airlines are expected to encounter more positive conditions next year, largely driven by a normalization of corporate travel and reductions in costly excess capacity. While these benefits won’t be unique to JetBlue, they could help the business as it works to improve its profitability and put further upward pressure on shares.
Given JetBlue’s longstanding difficulties in increasing its revenues and generating positive net incomes, though, investors may want to take a wait-and-see approach on the question of whether the JetForward program and other improvements will actually put the business back on the right track. For those looking for gains in the airline industry, already profitable options like United and Delta may present better buys for gaining exposure to the industry’s expected recovery without the risks associated with JetBlue’s uncertain turnaround strategy.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.