Today’s traffic statistics from easyJet (LSE: EZJ) are encouraging and show that the company is continuing to make progress during a relatively challenging period. In January the budget airline recorded a rise in passenger numbers of 6.3%, although its load factor (proportion of seats filled per plane) fell by 0.1% to 85% versus January 2014.

This wasn’t wholly unexpected since the company has struggled somewhat following the terrorist incidents in Egypt and Paris towards the end of 2015. As a result of them, passenger bookings declined but according to its recent update, they appear to be picking up somewhat.

Looking ahead, easyJet is forecast to increase its bottom line by 8% in the current year. This is slightly ahead of the wider market’s growth rate and indicates its shares could demand a significantly higher price-to-earnings (P/E) ratio than the one on which they currently trade.

For example, easyJet has a P/E ratio of just 10.3 which, given its track record of delivering double-digit growth in each of the last five years, seems rather low. A 20% rise in its share price would give a P/E ratio of 12.3, which would still be lower than that of the wider index.

Product expansion

Also reporting today is insurance and recovery specialist AA (LSE: AA). It’s trading in line with expectations and is making good progress in executing its strategy to strengthen the company. For example, it’s investing in brand marketing so as to slow the decline in Personal Member numbers, with new products and more attractive rewards successfully differentiating the AA offering from those of rivals.

Furthermore, AA launched its insurance underwriter service just last week and expects that this will add an important additional capability to its portfolio of services for motorists. And with it having successfully completed its first full year under its transformation strategy, it appears to be well-placed to cross-sell a broader range of products.

Looking ahead, AA is expected to increase its bottom line by 15% in the current year, which is roughly twice the rate of growth of the wider index. Its P/E ratio of 11.9 doesn’t appear to adequately reflect this upbeat outlook and even if it were to trade 20% higher, AA’s price-to-earnings growth (PEG) ratio would still stand at a very appealing 1.1. As such, 20%-plus capital gains are on the cards.

Playing the long game

Also having the potential to rise by over 20% in the long run are shares in Santander (LSE: BNC). It recently reported fourth quarter results with net profit up by just 0.3% versus the same quarter of the previous year. While that may initially appear to be disappointing, the context in which it was achieved indicates that Santander’s performance is relatively strong.

That’s because the Brazilian economy continues to be lacklustre and with it being a key market for the bank, it’s significantly hurting its financial performance. This means there’s the potential for downgrades to Santander’s short-to-medium term earnings outlook, which could negatively impact on investor sentiment.

However, with Santander having a price-to-book value (P/B) of only 0.8, a share price rise of 20% would still leave it trading at a discount to net asset value. This indicates that such a rise is relatively likely over the medium-to-long term.

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Peter Stephens owns shares of easyJet. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.