easyJet Share Price: At 455p, Down But Not Out

Core Viewpoint - The easyJet share price has been stagnant since the pandemic, with a significant decline of 18.4% this year, yet there remains potential for upside in the future [3]. Group 1: Market Dynamics - The recent weakness in easyJet's share price is largely due to competitor Jet2's announcement of later customer bookings for summer, raising concerns about cooling travel demand and reduced visibility for capacity and yields [4][5]. - Jet2 plans to cut its winter seat capacity by 3.4% to approximately 5.6 million seats, which has heightened fears among easyJet investors regarding potential impacts on profitability [5]. - Operational disruptions, including air traffic control strikes, are expected to negatively affect easyJet's FY25 pre-tax profit by £15 million, further complicating the operational landscape [6]. Group 2: Travel Trends - Despite some negative trends, there is evidence suggesting that travelers may be shifting their plans to shoulder seasons and winter, which could alleviate fears of declining travel demand [9]. - Data indicates that searches for autumn stays among young travelers have increased by over 25%, and one-third of travel agents report a rise in shoulder-season bookings [10]. Group 3: Financial Outlook - Forward sales for easyJet are reportedly up 1.0% for Q4'25 and Q1'26 compared to the previous year, indicating some resilience in demand [11]. - The macroeconomic outlook remains mixed, but consumer confidence has shown improvements, which could positively influence easyJet's performance in FY26 [14]. - The company's EPS CAGR projection has been revised down to 7.5% from 11.9% through FY27, reflecting a more cautious sentiment, while its EV/EBITDA remains undervalued at 1.3 compared to the sector's average of 2.4 [17].