JetBlue Cuts Costs, Humana Rises, Solar Falls

On this episode of Stock Movers:

- JetBlue (JBLU) plans to hasten cost cuts by eliminating some flights, ending service to a number of cities and restructuring its leadership ranks as economic uncertainty feeds weaker-than-expected demand for travel, the company said in an internal memo. The carrier will eliminate underperforming routes and plans to announce network changes in coming weeks, according to the memo from Chief Executive Officer Joanna Geraghty seen by Bloomberg on Tuesday. 
JetBlue implemented budget reductions at support centers and is assessing hiring, spending on business partners and vendors and will combine or restructure some leadership roles. The carrier has halted cosmetic refreshes of four out of its 10 legacy Airbus A320 aircraft used for flights and will park the planes at the end of summer.
“We’re hopeful demand and bookings will rebound, but even a recovery won’t fully offset the ground we’ve lost this year and our path back to profitability will take longer than we’d hoped,” Geraghty said. “That means we’re still relying on borrowed cash to keep the airline running.”

- Humana (HUM) shares were up as much as 4%, the most intraday in a month, as analysts are positive on the health insurer following its investor day event where it gave updates regarding expectations for earnings growth through 2028. KeyBanc Capital Markets says the investor day provided “a clear picture” of the earnings power of the business and how the company plans to unlock margins by 2028.

- Solar stocks, like Sunrun (RUN), SolarEdge (SEDG) and Enphase (ENPH) fell sharply after Senate Republicans released a bill that would end clean energy tax credits earlier than expected, dashing hopes that major cuts passed by the House wouldn’t stick. The new version of the bill released by the Senate Finance Committee would end incentives for wind and solar in 2028. Tax breaks for other sources of power, such as nuclear, hydropower and geothermal, would be allowed to remain until being phased out in 2036, according to a summary of the legislation.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios Podcasts, Radio News.

Speaker 2 (00:08):
The Stock Movers podcast, your roundup of companies making moves
in the stock market, harnessing the power of Bloomberg Data.

Speaker 1 (00:18):
I'm Carol Master along with Tim Stanevik. Let's take a
look at some stocks on the move today. We're joined
now by Bloomberg News process at reporter Denita Sikova. Denita,
let's start with Jet Blue. It was another down day
for this company.

Speaker 3 (00:30):
Yeah, the year today loss is now forty six percent.
Today it closed down eight percent. It's coming after news
about cost cuts, eliminating some of the roads, restricting of
this leadership ranks. The company has been doing so many
things to overcome this weakening demand in travel, which obviously

(00:52):
a lot of those airlines have been something that's been
coming in their costs more and more. We recently had
a partnership between United air Lines and Jet Blue, and
there was some optimism there about sharing points and kind
of the two companies benefiting from each other. But clearly
that wasn't enough. Jeed Blue withdrew their full year financial

(01:12):
outlook in April, and the cost cutting measures are not
so well accepted by investors because clearly this signals more
trouble in the company and as we said, down more
than forty percent year today and a lot of pressure
for airlines and travel more broadly.

Speaker 1 (01:29):
Well, that's where I wanted to mention, right, Like we
saw in terms of the airline names, most of the
major names, if not all of them. If you look
at some of the supercomposite Airlines index in the S
and P five hundred, all of them were down today.
So it was not an easy day. But jet Blue
the worst performers. You said, jet Blue ticker Jblu down
almost eight percent in today's session.

Speaker 2 (01:49):
All right, ticker hum Humana shares higher today.

Speaker 1 (01:53):
What's going on with Humana?

Speaker 3 (01:54):
We're having some good news there. The company is three
percent today. There are two to two parts of the story,
so it had a good investor days. We saw a
lot of optimism, some upgrades. For example, Key Bank Capital
Markets is saying that investor Day provided a clear picture.
They gave a big plan that's all the way to

(02:15):
twenty twenty eight. So there is like some measures for
costcus measures to include increase clinical excellence. So most of
analysts had a pretty positive reaction. There is one downgrade
from Bank of America, which actually maintains neutral but lower
surprise targets or it's not a down grade. But also

(02:35):
the other thing moving is in the Senate, they abandoned
one of the parts of the bill to cut costs
in the Medicare advantage program. And this is actually boosting
human and United health Care because obviously they're largely relying
retired Americans are relying on this, and this is good

(02:56):
news for the stock. The stock is still down five
percent a year today, but to much needed boost and
we're getting closer to being flat for the year.

Speaker 1 (03:03):
All Right, just got about twenty seconds.

Speaker 2 (03:05):
Quick.

Speaker 1 (03:06):
Tim has talked about this throughout the day, seller stocks
arounder pressure. Just quickly, what do we need to know?

Speaker 3 (03:10):
Yeah, they we saw some big drops today. For example,
Sun run with ticker are you and was down forty percent.
We saw a lot of similar drops about thirty twenty percent.
We're going back to that build that's moving through Senate.
They released the build that and tax credits for wind
and so there are some other credits that are extended
through twenty thirty six. But that's definitely putting a lot

(03:32):
of pressure on solar stocks. We're seeing some big downgrades
and more pressure. Of course, there are a lot of
changes there, so we yet to confirm the final bill.

Speaker 2 (03:42):
The Stock Movers podcast from Bloomberg Radio. Check back with
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