Dahlman Rose & Co. Reiterates Hold Rating on JetBlue Corp. (JBLU)

Dahlman & Rose Co. just issued a research report, where its analysts reiterates its Hold rating on shares of JetBlue Airways Corp. JBLU. The Dahlman analysts said, “We are estimating 3Q10 revenue growth of 20%, to $1.0 billion from $854 million. If JetBlue achieves these, they would be record quarterly revenues . We are estimating EPS of $0.18 vs $0.04 last year, which is a small increase from our prior estimate of $0.15. The current consensus estimate is also $0.18. For the full year, we are estimating EPS of $0.40 up from our prior estimate of $0.34 and more in line with the consensus estimate of $0.39.” They added, “The shares are selling at 16x estimated 2010 EPS of $0.40 which is above the high end of the historic range of 13x-15x for a high growth airline in a normal year. On an EV/EBITDAR basis, the shares are selling at 7.5x EV/EBITDAR, which is the high end of the 5x-7x range in normal years.” The analysts noted, “JetBlue and American Airlines AMR have an interline agreement that enables American Airlines passengers in 12 international cities and JetBlue passengers in 18 JetBlue cities to connect to each other's flights. The seamless travel of this interline agreement should help to drive revenues higher for both companies. The interline agreement went into effect July 20. Both airlines are now talking about frequent flyer reciprocity, so there is still more revenue potential going forward. There is likely to be some overlap, and with the ease of earning and redeeming miles on the two airlines, we suspect that there will be additional revenue benefit.”