EasyJet (LON: EZJ) share price made a strong bullish breakout this week as the company confirmed its strong summer bookings. While other airline stocks have remained under pressure recently, EasyJet’s stock surged to 536p, its highest point since May 2022. It has surged by over 92% from its lowest point in 2023.
EasyJet is doing wellEasyJet, one of the biggest regional airlines in Europe, is doing well, helped by the robust demand for flying. In a statement on Thursday, the company said that its headline loss in the last quarter narrowed to £126 million from £133 million in the same quarter a year earlier.
Its passenger growth jumped by 14% YoY even as the load factor fell slightly. Its ticket and ancillary yields rose by 2% and 6%, respectively.
Most importantly, the company said that it had seen strong summer bookings even as the crisis in the Middle East escalated. The company has some flights on the route. In a statement, the CEO said:
“We delivered an improved performance in the quarter which is testament to the strength of demand for our brand and network. The popularity of easyJet holidays also continues to grow, with 48% more customers in the period.”
EasyJet is also benefiting from its flight composition. Like other low-cost carriers, the company uses planes from Airbus, which has a more proven record compared to Boeing. As a result, it has not seen any halts in the past few weeks.
Most importantly, EasyJet has a strong balance sheet, which gives it more flexibility in how it does its business. It ended the quarter with over 1.9 billion pounds in cash and money market funds and a net debt of just 0.5 billion pounds.
There is a likelihood that the company’s revenue and profitability will improve this year as the travel industry booms and inflation retreats. In a statement on Friday, Onto the Beach, another tourism-focused company said that it was seeing strong demand as customers prioritise discretionary expenditure.
EasyJet share price forecast
I have been bullish on EasyJet for a while. In 2022, I compared EasyJet and IAG and concluded that it was a better investment. Turning to the daily chart, we see that the EZJ stock price has been in a strong uptrend in the past few months. It has flipped the important resistance level at 534.8p into a support point.
EasyJet stock has also remained above the 50-day and 200-day Exponential Moving Averages (EMA). It formed a golden cross when the two moving averages crossed each other on December 19th. Therefore, the outlook for the stock is bullish as investors target the next key resistance point at 600p. The stop-loss of this trade will be at 520p. The key risk for EasyJet is if the prices of jet fuel continue surging.
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