 Hot from the press ...Questor says buy at this levelQuestor: this airline lost 66pc since our first tip but it's ready for take-offRobert Stephens17 September 2024 8:00pmDescribing a departing chief executive as a lame duck is somewhat unfair. After all, they are still likely to have a significant impact on the firm's financial performance between the time they announce their resignation and the date of their departure.In reality though, investors know that the incoming chief executive will almost inevitably make changes to the company's strategy. Therefore, they typically adopt a "wait and see" approach so they can deduce how a new incumbent intends to deliver future profit growth. This can mean that a firm in the process of implementing senior management changes fails to deliver significant index-beating performance in the short run.With easyJet's current chief financial officer set to become its chief executive early next year, Questor would not be surprised if its share price performance is somewhat uninspiring in the near term. This is despite the company facing an improved operating outlook that should catalyse its financial performance.Indeed, the firm's latest quarterly trading update showed it was making encouraging overall progress. Revenue increased by 11pc and profits rose by 16pc in the third quarter as passenger demand continued to grow. Passenger numbers were up 8pc versus the same period of the prior year, with the company's load factor rising by 0.4 percentage points to 90pc and capacity up 7pc year-on-year. Demand for the company's services should continue to rise. Investors may become increasingly concerned about a cost-of-living crisis, since inflation is due to creep up to just under 3pc by the end of the year but pressure on discretionary incomes has all but dissipated. When combined with the positive impact on consumer spending from an expected sustained fall in interest rates, which are due to decline by around 120 basis points over the next two years, the outlook for the airline industry is becoming increasingly upbeat.According to the International Air Transport Association, passenger numbers in Europe will rise at an annualised rate in excess of 5pc during 2025 and 2026. easyJet is becoming increasingly well placed to capitalise on an improving market outlook, with the firm expecting to grow its capacity to 100 million seats in the current financial year. If met, this would represent an 8pc year-on-year rise.The company's strategy of expanding its package holidays division is also set to boost its financial performance. easyJet holidays is expected to generate pre-tax profits in excess of £180m in the current financial year, which would equate to a 48pc increase on last year's figure. The segment's strong growth rate is expected to contribute to a 23pc annualised increase in the firm's earnings per share in the two financial years to 2025. This puts the company's shares on a forward price-to-earnings ratio, using financial year 2025's profit forecast, of just 7.6. This suggests that the stock offers a wide margin of safety, with investors apparently not yet having priced in a vastly improved financial performance over the coming years.Growth in the easyJet holidays segment also reduces overall risk, since package holidays are relatively resilient due to their perceived value-for-money offering. The company's risk/reward opportunity has also improved as its financial position has strengthened. For example, its net cash position rose from £146m in March to £456m in June. This shows that the firm is capable of not only overcoming future periods of economic instability, but can also reinvest for long-term growth.Of course, easyJet's share price performance has proved to be a huge disappointment since Questor first tipped the company in July 2017. It has produced a 64pc capital loss since then and has underperformed the FTSE 100 index by 75 percentage points. While we do not expect a dramatic turnaround in the firm's share price performance in the short run, this column nevertheless remains upbeat about the company's long-term recovery potential. It is becoming increasingly well placed to take advantage of an improving operating environment, while its rapid expansion into adjacent product areas provides scope for additional growth. With a solid financial position that has significantly improved over recent months and a wide margin of safety included in its market valuation, the stock remains a worthwhile purchase despite its downbeat past investment performance. Questor says: buyTicker: EZJShare price at close: 517.4p |
Anyone know a reason for today's sudden leap? |
Anyone following any short term trading strategy with EasyJet? Exit points for Selling? Entry points for Buying? |
EZJ is definitely undervalued but it has been a recent disaster
Hopefully today marks a turning point |
Jet2 stale...say that again on Thursday with a big slice of humble pie. |
2 year chart looking interesting, Lower lows and higher highs.... |
The market is not correct. That's the whole point. The easyJet share price is ridiculous against the commercial opportunity.
Jet2 business model is stale and expansion will be difficult to maintain. Easyjet has opportunity within their model.
The market doesn't see it yet but it will. |
Of course I can say it LOL
You can easily smell a ramper on these bbs |
Phillis, you can't say that on here, sapphire won't allow it, EZJ is the best airline in the world and the best holiday carrier ontop, all despite being a budget airline competing against bigger players such as Ryanair.
From a share price perspective it's been a dog |
why the rise here today ? can't find anything ? |
That must be why their share price has underperformed JET |
I don't hold Jet2 for several reasons.
Their business model is at saturation. Growth is limited and without major investment in aircraft and crew they can't increase volume.
The Jet2 relationship with hotels is very risky. They are limited to designated hotels reducing choice. The capacity is sold to Jet2 in advance not at the point of booking. This means that any downturn or slowing doesn't just reduce potential profit but increases losses.
Jet2 holiday saturation into the airline 70% easyJet 4%. This year it may reach 6%. easyJet can double, triple or quadruple volume from current capacity.
I hold easyJet because they hold all the aces. |
I hold both Ezy and Jet across family holdings
I prefer Jet on balance |
Sleazyjet is my preference. EZY are so brand new into the package holiday sector and Ryanair are so powerful they can easily catch and surpass. if EZY think they have seen this up and join Jet2 and TUI they are sadly mistaken. EZY would also go bust if tomorrow they tried to be 70% package holiday. It's utter madness there appears to be a loss of value in the business traveller and social/domestic travel. |
Cev it's a very common name on the Costa for ryanair. Ryanair are a company not a person. It doesn't have feelings.
I noticed that you call it ryanair not Ryanair Holdings PLC.
Equally the company ryanair holdings plc are not bothered, offended or hurt.
Easyjet is commonly called squeezyjet, they are not hurt either.
Pikeyair is reference to the Irish heritage. I don't see the problem with it. I hear it said many times. It may not be a British thing but that suits me fine.
Sick of the moaning. That is a British thing. |
Sapphire, I agree 100% but when you revert from factual data and analysis to simple childish name called, such as pikey air, you've lost it.
If you have no dignity, simply disappear. |
Of course easyJet city to city routes will continue. I expect all of that business to be flat.
The North South routes are where the growth is. This is especially true for easyJet because of the 10X profit potential of the holiday business. Ryanair doesn't have this option because their business has no depth.
easyJet are so far ahead commercially. |
Cev ryanair are a binary business. They have no depth and have been fortunate with timing a position. They filled a void with little competition. They just have price and nothing else. They are badly run and limp from one disaster to another.
Ryanair are going to find it very difficult to proceed with their model and ultimately will only survive on the back of zero competition routes. Already these are being squeezed and in the near future that's going to become more apparent.
They are a toxic player in the tourism business and they think the whole industry needs them, it's simply not the case. Yes O'Leary will be moaning and bleating like a baby but gradually his influence declines.
Ryanair have done nothing right since covid they have simply lifted with the market return.
Easyjet has made strategic manoeuvres to position for growth whilst O'Leary tries to blame others.
My business doesn't work with Ryanair and never will. We have worked with Jet2 but right now the direct bookings are so strong we don't need pre-sold capacity with a package provider. |
Tit, we embarrass you everytime you post your idiotic predictions.
Simply go away |
Norampinhg what would you know ya muppet det back in your box muppet 😂 |
Noramping, I agree 100% with what you say.
Sapphire does post a micro viewpoint of Southern Europe flight routes and passenger numbers.
I have to agree with her viewpoint of the potential of Easyjets holiday business and it's profit potential as it hopefully increases from 4% to 6% and onward to 70% as it also increase it's operational capabilities through bew aircraft deliveries and financial savings through fuel efficiency.
This slagging consistently of scabby pikey air etc is simply foolish, amateurish and if she worked under me, she'd be got of.
Simple as.
Dignity, respect are paramount in business and Ryan Air are the monsters of this segment of the industry.
Yes, I believe that Easyjets business plan is vastly superior to Ryan Air, but don't poke the big bear when you are still growing. |
Sapphire, so your investment case is to trash other companies, facts are industry leaders in EZJ marketplace aren’t EZJ.
If Ryanair sneezes easyJet gets a cold. |
More divergence again between easyjet and trash. 5 of the last 9 trading days have gone this way.
Quality always floats eventually one way or another |
Ever little helps |
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