The Easy jet (LSE: EZJ) The share price was on a roller-coaster ride late. The airline’s stock is more expensive than last year (up to 32% in reality). But last week it closed at a 10-month low of 566p before bouncing again.
And at the beginning of the week it rose again. Indeed, at 654.2p per share, EasyJet closed 3.8% higher on Monday trading. Can low-cost flyers reach heights? And what should I buy FTSE 250 Is the company based on its long-term profit outlook?
Why EasyJet can climb
I think there are several reasons why EasyJet’s share price could rise. These include:
- Another return to the travel ban. UK travel shares like EasyJet rose last week when Britain announced changes to its tough travel bans. And today airline stocks jumped again when news came that the United States was about to lift its travel ban for coronavirus-vaccinated British and EU travelers. EasyJet has no skin in the transatlantic game. But easing the travel ban is positive and better news could come on this front.
- A new takeover procedure occurs. Shares of EasyJet fell to the floor last week, launching a b 1.2bn rights issue to bolster its balance sheet. Investors were also not impressed by the news that Luton-based airlines had thrown behind a takeover system (rumor had it) Wiz Air). Although it could be the opening salvage of a takeover battle for EasyJet? In the wake of the Covid-1 crisis, the industry is poised for consolidation and could be a cash-rich competitor. Ryanair Waiting for the wings.
Why am I resisting the share price of EasyJet
There could definitely be an opportunity for EasyJet’s share price to rise. But there are many things that can turn a company’s stock into a tailspin. The most common, of course, is getting worse in the coronavirus crisis and the need to raise additional funds at a later time.
As an analyst Hargreaves Lansdowne Recently commented: “As winter approaches and the delta diversity spreads, EasyJet lowers hatches for another year’s travel trends.. The business still has a total net debt of £ 1.1bn in its books. And as well as increased revenue pressure easyjet fuel costs could rise sharply if oil supply problems increase.
I love EasyJet and I think it has a bright future because there is still plenty of room to grow in the low cost travel segment. But the airline’s outlook for the short to medium term remains uncertain as the incidence of Covid-1 cases continues to rise. At the moment, EasyJet’s share price is trading at a 32-fold high price-to-earnings (P / E) ratio. And in my opinion it does not provide an attractive risk / reward balance for my portfolio.
Is the post EasyJet’s share price too cheap for me to miss? The Motley Full was first published in the UK.
- Will EasyJet’s share price continue to rise?
- Should I buy EasyJet (EZJ) shares before a potential acquisition?
- Do I need to buy EasyJet shares after a few weeks of volatility?
- Where will the easy share price go?
- Understand the rights issue of EasyJet
Ryston Wild has no position on any of the shares mentioned. Motley Full UK is recommended by Hargreaves Lansdowne and Wise Air Holdings. The opinions expressed in the companies mentioned in this article may differ from those of the authors and therefore the official recommendations we make on our subscription services such as Share Advisors, Hidden Winners and Pro. Here at The Motley Flower we believe that considering a variety of insights makes us a better investor.