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Carl Icahn Acquires Stake in JetBlue (JBLU) Activist Investor Carl Icahn Acquires Significant Stake in JetBlue (JBLU)

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JetBlue Airways’ (JBLU) stock surged in after-hours trading on Feb 12, following the revelation that activist investor Carl Icahn has acquired a 9.91% stake in the company, as per a filing with the Securities and Exchange Commission (SEC).

Icahn expressed his belief that JBLU shares are undervalued, deeming them an attractive investment opportunity. Furthermore, he intends to engage in discussions with the airline’s management and board of directors regarding the possibility of securing a position on the board.

These developments come in the wake of Joanna Geraghty’s appointment as the CEO of JetBlue, following her tenure as the company’s president and chief operating officer. Notably, Geraghty is the first woman to lead a major U.S. airline. She succeeded Robin Hayes, who helmed the company for almost a decade.

JetBlue’s stock rise offers respite after the company’s proposed acquisition of Spirit Airlines (SAVE) for $3.8 billion was thwarted by a federal judge, leading to an 8.3% decline in JBLU shares over the past six months, contrasted with the 1.1% decrease in the Zacks Airline industry.

The failed merger stemmed from competition concerns, with the judge fearing that it would drive up airfares. JetBlue and Spirit Airlines have appealed the decision, with a U.S. court scheduled to review the case in June.

Zacks Rank & Key Picks

JetBlue currently holds a Zacks Rank #3 (Hold). For investors eyeing the same industry, SkyWest (SKYW) and American Airlines (AAL) are potential considerations. SkyWest boasts a Zacks Rank #1 (Strong Buy), while AAL carries a Zacks Rank #2 (Buy).

SkyWest, headquartered in St. George, UT, has shown remarkable fleet modernization efforts. The company is on track to operate 258 E175 aircraft by 2026, with noteworthy shareholder rewards through buybacks, alongside promising passenger volumes.

Over the past 60 days, the Zacks Consensus Estimate for SKYW’s 2024 earnings has been upped by 11.2%, while SkyWest shares have surged by 31.7% in the last three months.

American Airlines is experiencing positive growth driven by a resurgence in air-travel demand, particularly domestically. The carrier’s proactive debt reduction plan aims to eliminate $15 billion in debt by 2025.

The Zacks Consensus Estimate for AAL’s 2024 earnings has been adjusted upward by 4.19% over the past 60 days, with AAL surpassing the Zacks Consensus Estimate for earnings in each of the last four quarters, averaging a 23.83% beat.

To read this article on Zacks.com click here.

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