Why the drop in stock prices?

[bluejuice787]

I just came in from a trip and saw that the markets were up for the day but that all the airlines showed a loss. Some, like my company, were pretty substantial. Anyone know why?

 

[FDJ2]

I just came in from a trip and saw that the markets were up for the day but that all the airlines showed a loss. Some, like my company, were pretty substantial. Anyone know why?

Price of oil and over valuation.



Raymond James analysts, who downgraded JetBlue to market perform from outperform, wrote that "we think JBLU shares have gotten ahead of its earnings progression on a near-term basis." The stock has risen 30% since the analysts upgraded the stock Oct. 28, according to a research note from the firm.
At Merrill Lynch, analysts downgraded JetBlue to neutral from buy, saying its financial performance doesn't justify a hefty premium for the shares, which are near Merrill's 12-month price target of $16.67.
The company's fortunes could rise as fuel prices fall, rivals in the U.S. cut capacity and fares strengthen, the Merrill analysts said. But costs associated with the carrier's expansion as well as new rivals like Virgin America could pressure the company, they said.

 

[Spectre]

You really can't predict airline stocks. NWA stock was still going skyhigh right up to the point where they declared bankruptcy. AMR and CAL have doubled their value in two months to over $20/share. However, they both will declare huge losses in 2005. These "analyst" have great power in how they grade the stocks. I just find it interesting how they over value JBLU, but say nothing about AMR and CAL.