JetBlue Airways Corporation
Thesis
JetBlue has significant upside potential as it implements shareholder-focused initiatives under new CEO Robin Hayes. The company is expected to improve its return on invested capital (ROIC) by over 700 basis points, driven by low-hanging fruit initiatives and potential load factor increases. At an 8x adjusted EBIT multiple for 2017, JetBlue could be valued at $26 per share, indicating a 64% upside from its current price of $15.15.
Did it work?
The long thesis targeted $26/share (64% upside) based on a 2017 EBIT re-rating driven by ROIC improvement under new management. While JetBlue did execute margin/ROIC initiatives and the stock rallied meaningfully in the first few years (approaching the low-$20s by 2017-2018), the stated horizon has long passed and the stock has since collapsed, returning -68.3% over the 140 months since the pitch. A long thesis that ends with a two-thirds loss of capital, far below the $26 target, is decisively invalidated.