Easyjet: 80% profitability in one month
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Easyjet shares have soared 80% in just one month, according to Preferente. On May 28 they traded at 3.94 pounds, today they are around 7 pounds. A revaluation that puts the orange carrier back on travel investors' radar.
The trick? The airline was undervalued. It happens to companies with solid assets but low profitability. The market punishes them, until the wind changes. And change it did: peak season, pent-up demand, cost adjustments. The rebound has been brutal.
There is a lesson here for the sector. The stock market does not forgive a lack of cash generation, but it does not forget a solid balance sheet either. Easyjet weathered the pandemic, restructured routes, and is now reaping the benefits. And this is not a bubble: it is a price adjustment to reality. If demand stays strong, margins could stretch even further.
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