JetBlue Air (JBLU) stock dropped more than 25% on Tuesday following the airline company’s quarterly earnings report. The drop in price was the stock’s largest since going public more than 20 years ago.
JetBlue’s earnings results for the last quarter were better than analysts’ expectations to lose $0.29 per share. The company did miss its revenue target as year-over-year sales dropped by -2.1%. This marks five out of six quarters of declining revenue as JetBlue focuses on a balance sheet turnaround.
It is also notable that the company’s revenue fell short of the company’s most recent guidance given on December 4. Competitors like Delta (DAL) and United (UAL) have forecast higher revenue as travelers continue to book despite higher prices.
Investors reacted to the news with heavy trading volume putting JBLU shares on the brink of a long-term bear market trend.
The stock ended Tuesday at $6.00. Shares had traded as low as $5.75, reflecting the strong price support that round numbers under $10 often lend to a stock.
That $6.00 price is extremely critical over the short term as a move below the mark will extend JetBlue’s shares long-term bearish outlook.
The stock shifted below its 20-month moving average in March 2022. That long-term trendline is used as the line of demarcation between a stock being in a bull or a bear market.
Shares have been trying to break this long-term bear market trend for a year, unsuccessfully.
A return below $6.00 will draw more selling pressure into the market for JetBlue with a target price of $5.00.