What’s going on with EasyJet’s share price?

The Easy jet (LSE: EZJ) The share price has been on a volatile journey for the past one year. On a 12-month basis, the airline’s price has increased by 22%, which is a result of the earlier profit due to the introduction of the Covid-1 vaccine.

Terrible fears over the Delta variant, but shares of EasyJet have been falling since the spring. Covid-1 cases have jumped again and the forecast for a full recovery in the travel industry has returned to some quarters. Rising inflation in the airline’s European market has not helped, and recently the airline’s share price has pulled down to its lowest level since last November.

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At 605p, EasyJet shares are falling again. Although the latest trading update from Budget Airlines this week said the sky could be brighter. Does this present an attractive buying opportunity for long-term investors like me?

Clouds rising?

EasyJet said this week that it expects last year’s pre-tax losses to be between £ 1.135bn and 1.175bn. This is thanks to a 50% year-over-year decline in the fourth quarter. City analysts forecast a loss of 1. 1.175 billion for the fiscal year ending September 2021.

EasyJet added that it expects capacity to grow rapidly. Between April and June, the capacity came in at 17% of the FY201 fiscal year and increased to 58% in the next three months. And in the last quarter of this calendar year, business capacity will increase to 70%. The company said it expects bookings in the first half of fiscal 2022 “Twice the same period last year. ”

This news, nor the significant improvement in the airline’s balance sheet, did not help lift EasyJet’s share price. The FTSE 250 The company generated about 40 40 million in operating cash in the fourth quarter of last year, down from its recent £ 1.2bn rights issue earnings, down from 2 2bn a year ago to debt 900m in September.

Will EasyJet’s share price continue to crash?

Johan Lundgren, CEO of EasyJet, announced that “IIt is clear that the recovery is underway. ” But I don’t think it’s safe to say that the unrest is over. As the company noted, visibility is limited because travelers delay bookings until they are close to the date of their trip. This is why Luton Airlines is not yet issuing guidelines for the new fiscal year.

Concerns about passenger levels are not the only thing that can depend on the price of EasyJet shares. Business hedged 55% for expected fuel requirements this fiscal year. But it clearly does not provide complete protection from the potential extended period of high fuel prices.

Today, EasyJet’s share price is 32 times the forward P / E ratio. I don’t think it offers particularly good value. The persistent Covid-1 crisis has worsened its recent recovery and rising inflation has eroded consumer confidence and pushed up fuel costs. I would rather buy other less risky UK shares at the moment.

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Ryston Wild has no position on any of the shares mentioned. Motley Flower UK has no position on any of the shares mentioned. Opinions expressed in the companies mentioned in this article may differ from those of the author and therefore our official recommendations in 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.

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