EasyJet’s share price has been moving sideways over the last few weeks, as the airline continues to perform below other carriers like United Airlines or IAG (parent company of British Airways). The EZJ share price was 542p, a 95% increase from the lowest point in 2023.
EasyJet shares price stable after earnings
After the company posted strong financial results and outperformed other companies, the EZJ share price stabilised this week.
The company’s profit increased to PS960m, a new record. This was due to an increase in demand and the implementation of cost-cutting measures. The company hopes to reach a profit of PS1 billion.
Profit before tax increased to 6.08 PS per seat, a 24% increase. The PBT for holidays increased by 56%, to PS190million. The industry has faced major challenges over the last few months, which is why these numbers are noteworthy.
Data from recent years showed that costs of flying continue to fall, which has affected the revenue and profitability for most airlines. Boeing and Airbus also faced challenges, which affected the entire industry.
Boeing deliveries are down due to a regulator’s scrutiny. Meanwhile, some Airbus aircraft have been repaired because of engine faults with Pratt & Whitney.
EasyJet reported that it had carried 82.8 millions passengers last year, but this was a slight decrease. Average revenue per seat in FY’24 was PS81.35. Fuel costs per seat increased slightly, to PS22.14. EasyJet’s profits before taxes rose to PS610 millions.
The company has also continued to upgrade its fleet, placing 299 orders firm for A320 and A321 aircraft. Airbus has also granted 100 rights to purchase aircraft. Kenton Jarvis wrote:
EasyJet’s outlook is optimistic. Travel remains the top priority for consumers, who appreciate our unrivaled network and service. We expect the airline to continue growing, especially on long leisure routes such as North Africa and Canaries. And we intend to send 25% more people on holiday packages.
EasyJet has also one of the strongest balance sheets within the airline industry. The credit rating is BBB/Baa2 with an outlook of positive. It is rated higher than many other airlines, such as United, Delta American and Lufthansa.
Its strong cash flow and balance sheet has allowed it to pay and increase its dividend. The company increased its dividends by 20 percent of the profit it made after taxes.
EasyJet’s share price appears to be undervalued in comparison with other airlines. EasyJet has a trailing ratio of 10 for its price to earnings, which is lower than popular airlines such as IAG or American Airline.
EasyJet also makes progress in its bid to be a stronger competitor to Ryanair. EasyJet is increasing its number of routes and planes while cutting costs to increase profits.
The company is also thriving in its packaged tour business, as they compete against TUI Group and Jet2.
EasyJet Share Price Analysis
Weekly chart shows EZJ’s stock has been on an upward trend for the last few months, and now has reached an 8-month high. The EZJ stock price has reached an eight-month high. It is now above both the 100-week and 50-week exponential moving averages.
EasyJet’s stock also rose above the Fibonacci retracement of 23.6%. The MACD has also moved over the zero-line, and the Relative Strength Index has risen from 58 to 58.
There is therefore a high probability that the share price will rise and hit the 50% level of retracement at 770p. This is about 40% higher than the current value.
It is the rising wedge, a common bearish reversal pattern that poses the biggest risk to EZJ’s share price. This pattern could lead to a breakout in the bearish direction and a possible retest of the 418p support level, which was the low swing from August 5. If the stock breaks below this level, it will indicate further downside.
EasyJet Share Price Analysis: Buy, Sell, or Hold?
EasyJet’s share price may surge by 40%, as explained in this post.
This site is for entertainment only. Click here to read more
