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This morning (16 April) has heaped yet more misery on easyJet (LSE: EZJ) investors, as its shares drop 4.5% following a poor set of first-half results. The easyJet share price is now down 16.5% over the last year, and a brutal 54% over five. So are we looking at the kind of buying opportunity that only comes along once every 10 years or so?
Actually, make that 14 years. At today’s price of roughly 375p, the budget carrier’s shares are back to 2014 levels. That may well tempt bargain seekers but obviously, there’s a risk. The stock might just keep falling. Frankly, it has become a bit of a habit.
Regular FTSE 250 faller
Yet investors are starting to wake up. Figures from investment platform AJ Bell show easyJet was the eighth most bought UK stock last month. Sadly, anybody who did snap it up in March may wish they’d waited.
This morning’s trading update for the six months to 31 March showed an expected loss before tax of between £540m and £560m in the first half of 2026. That’s potentially up more than 40% from a £394m loss in the first half of 2025.
The good news is that EasyJet typically makes the bulk of its profits in the second half. Full-year 2025 profits ultimately landed at £665m, up 9% on 2024. Unfortunately, the second half of the 2026 financial year looks much less certain, due to the war in Iran.
That’s already starting to bite, with easyJet facing £25m in extra fuel costs in March alone. It’s also facing ongoing “near-term uncertainty around fuel costs and customer demand”, the board said today. Nobody knows how bad the oil price spike and shortages will be. There’s even talk of summer flight cancellations, but we just don’t know yet. It would be a huge blow should the conflict hit the peak summer flying season, where easyJet makes its real money.
Last month, CEO Kenton Jarvis warned prices might have to go up by the end of the summer to cover extra fuel costs. Given the broader squeeze on consumers, that could further hit demand.
Solid balance sheet
There were some positives today. First-half demand remained solid, with the load factor up two percentage points year on year to 90%. Its successful easyJet holidays venture continues to enjoy strong demand, with customer numbers up 22%.
The board also highlighted the group’s “investment grade balance sheet”, with net cash of £434m and liquidity of £4.7bn. It’s also 70% hedged for jet fuel prices over the summer. It just worries me slightly that the board felt the need to point that out.
easyJet already faced big challenges, and they’ve just intensified. I’ve been watching it for several years but haven’t taken a punt on it yet. Today, it looks more tempting than ever, with a super-low price-to-earnings ratio of 5.89 and trailing yield of 3.5%. At some point, the shares will surely fly, but investors would have to be very brave to consider easyJet today.
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