The best valuation method for JetBlue is the income valuation approach using
the discounted cash flow (DCF) method. “DCF analysis attempts to figure out
the value of an investment today, based on projections of how much money it
will generate in the future.” (Fernando, 2022) This approach uses the time
value of money which simply implies that a dollar today is worth more than a
dollar in the future. Essentially, for an investment to be worth it, the value of
DCF should be higher than its initial or current value. This method would work
well for JetBlue as they have a proven track record of generating income
(especially prior to the pandemic). Utilizing JetBlue’s financial history, future
cash flows can easily be predicted and discounted to determine the value of
the company.
Reference:
Fernando, J. (2022, June 3). Discounted Cash Flow (DCF). Retrieved from
https://www.investopedia.com/terms/d/dcf.asp
