easyJet‘s (LSE:EZJ) long-term share price performance is clearly disappointing. Currently hovering near £5, the shares are considerably below its 2021 high of nearly £9 and a fraction of its 2017 pre-pandemic highs.
So with both travel resilience and operational performance improving, is a return to those post-Covid highs realistic?
Rebounding
easyJet suffered heavily during the pandemic, registering huge losses in 2020. In response, the airline raised capital and slashed costs.
The past two years tell a different story. Net profits rebounded to £324m in 2023 and hit £452m in 2024, with further improvements expected. The company has also turned its net debt into a net cash position, projected to reach £450m by the end of 2025.
Recent results give further cause for optimism. For the latest quarter, group revenues climbed nearly 11% year-on-year to £2.92bn. EBITDA margins improved and pre-tax profits leapt by over a fifth to £286m.
Meanwhile, passenger numbers continue ticking upward, while average revenue per seat is rising faster than costs. The Holidays (packages) business remains a standout, delivering double-digit growth with robust forward bookings.
It’s all about valuation
Valuation metrics show just how cheap easyJet remains. On expected 2025 earnings, the shares trade at just under 7.5 times earnings, dropping to below 6 times on 2027 forecasts.
EV-to-EBITDA sits well south of 2.3 times — these are levels well below rivals Ryanair and Wizz Air. This is aided by the strong cash position. What’s more, easyJet’s resuming dividends after a pandemic pause, with a prospective forward yield moving past 2.5% and a clear commitment to growing payouts.
Valuations are all relative, so this data does suggest some room for appreciation. Analysts broadly agreed with no Sell ratings and the average share price target being 33% ahead of the current position.
The bottom line
Operational progress is visible too. The carrier’s steadily modernising its fleet with fuel-efficient A320neo aircraft, helping manage costs even with some inflationary and regulatory pressures (notably from air traffic control disruption).
Customer satisfaction and on-time performance are trending up, and strong cash generation and fresh loan facilities have driven interest costs lower. Clearly, lots of operational positives. These are also compounded by lower fuel costs in 2025.
Yet, risks remain. Low-cost UK airlines have been hit by the government’s decision to increase employers National Insurance contributions and increases to the Minimum Wage. This has put additional pressure on margins.
So will easyJet retake its 2021 highs? If current momentum continues, with steady passenger growth, improving yields, strong Holidays profits, and modest cost control, a recovery towards £6.60 over the next year or two is credible.
However, £9 per share may take longer to achieve. It’s clearly possible noting the resilience of the holiday market and the improvement of easyJet’s balance sheet. It’s one for my watchlist. I believe investors should give it plenty of consideration.
