JetBlue Stock Offers Attractive Returns for Patient Investors

The airline industry has been the subject of controversy since the novel coronavirus pandemic hit back in March. With the threat of a second wave still looming, many are hesitant to pick up airline stocks. And while most of the industry isn’t worth picking up just yet, JetBlue (NASDAQ:JBLU) stock makes for a great buy for long-term investors willing to wait out a stretch of volatility.

Don't Get Too Excited About JBLU Stock Just Because It Isn't Terrible
Source: Roman Tiraspolsky /

It’s no secret that airlines are hurting in the wake of the global pandemic. In mid-August, JetBlue CEO Robin Hayes said as much while pleading with lawmakers to come to a stimulus agreement:

“The day of reckoning is coming for the industry, because we can’t continue with where we are in terms of numbers of jobs we have and see demand at 25% to 30% of where we’d normally be.”

But While Hayes’ “day of reckoning” comment does suggest doom and gloom ahead, air travel isn’t going away forever. That means long-term investors with a healthy dose of patience can wait out the turbulence and benefit from a strong rebound over the next 5 years.

JBLU Continues With Expansion

There are a host of airline stocks out there to choose from, but JBLU stock makes for one of the best long-term plays.

While Hayes noted that the industry was approaching a cliff’s edge in regard to passenger numbers, he also commented that it would be “reasonable” to expect the firm to wade into international waters with service to London during the back half of 2021.

That should give investors a bit of confidence in JetBlue’s future as a company. Hayes is rightfully worried about the airline sector in the event that Congress doesn’t dole out any more stimulus payments — but he still sees the firm expanding in a year’s time.

Why JetBlue Is A Winner

Aside from JetBlue’s international aspirations, the firm looks like one of the best bets in the airline sector because of its strong positioning. Back in June, we saw JBLU stock make its way above $15 per share as investors started to see the light at the end of the pandemic tunnel.

People were slowly making their way back onto planes, and advancements in the development of a coronavirus vaccine gave investors reason to hope for the best among airlines. Since then, setbacks vaccine-wise and a spike in new virus cases around the world has brought JBLU stock back down to $12 per share.

But that’s all part-and-parcel for the airline sector. Airline stocks are extremely reactive to vaccine news and coronavirus updates. Moving forward that rollercoaster will likely continue until the pandemic is firmly in the rearview mirror. Those who have time to wait it out can use the yo-yo effect to their advantage. JBLU isn’t going to zero, so a pullback like this one is a buying opportunity.

JetBlue’s Strong Position

JetBlue has a strong position in the U.S. domestic travel market, which is a good place to be when a pandemic strikes (relatively speaking). As travel returns, the domestic market will pick up faster than international travel due to travel restrictions, new outbreaks and political red-tape as the pandemic progresses.

Flying from state-to-state, though, will likely remain open to healthy travelers.

Speaking of healthy travelers, a vaccine isn’t the only thing that will save airline travel. Faster on-site testing capabilities could also be a game-changer for the travel industry. So would high-tech temperature scanners that allow TSA agents to efficiently scan large groups of passengers.

The Bottom Line On JBLU

JetBlue isn’t in the clear quite yet. Hayes is right, Congress needs to come to a stimulus agreement or the airline industry is going to suffer badly. But failure to deliver more stimulus will be a gut punch to almost every industry on the market, as it shoves Americans over an income cliff they’ve been carefully navigating since March.

The most likely outcome is that stimulus is on its way in some form or another, and that will probably boost travel stocks — JBLU included. Investors who can wait out some volatility and are willing to hold JetBlue stock for the next 5 years should consider picking up shares.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities.

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