The FTSE 100 is residence to some big-name shares, however not all of them are hovering proper now. One firm that’s caught my consideration is easyJet (LSE: EZJ).

As I write on 24 February, shares within the price range airline are down 11.4% for the reason that begin of 2025. That is regardless of the Footsie gaining greater than 5% in the identical time.

The corporate is synonymous with price range journey in Europe and has been working onerous to broaden its flight community. I wished to see if this well-known title with promising financials and a beefed-up dividend could be a great match for my portfolio.

How has the easyJet share price been travelling?

easyJet had a powerful 2024. The airline posted a 34% soar in pre-tax income to £610m, pushed by a record-breaking summer season. Income climbed 14% to £9.3bn, with nearly 90m passengers flying with the service.

The inventory’s post-pandemic restoration was punctuated by administration greater than doubling the dividend from 4.5p to 12.1p per share.

Regardless of the spectacular annual outcomes, easyJet’s valuation has slid decrease within the early a part of 2025. Administration pointed to this 12 months’s timing of Easter as a key purpose for the weaker-than-expected second quarter, in addition to investments in new, longer routes that may take some time to achieve full potential.

Valuation

Let’s discuss numbers. At its present £4.93 share price, easyJet has a price-to-earnings (P/E) ratio of 8.3. That is much like Ryanair (8.9) however pricier than Wizz Air (6.6). That to me says it’s valued fairly pretty in comparison with friends.

In fact, these figures are rather a lot decrease than the Footsie common of round 14.5. That’s largely because of the truth that airways are reliant on customers spending on journey and leisure, which suggests their efficiency will be decrease when the financial system is in hassle.

The dividend yield is at the moment 2.5%, which isn’t the best within the Footsie, nevertheless it’s a giant enchancment from earlier years.

My verdict

There’s rather a lot to love about easyJet proper now. Regardless of the second-quarter wobble, passenger numbers stay stable, whereas income and revenues appear to be trending the fitting approach.

Administration seem assured within the outlook after greater than doubling the dividend. The relative valuation doesn’t give me an excessive amount of trigger for concern.

Nevertheless, it’s not all sunshine and rainbows. The inherent cyclicality of earnings pushed by client spending is one purpose why easyJet shares may undergo in a recession. Throw in rising geopolitical tensions and unsure gas prices, and there are many potential downsides to proudly owning the inventory.

On stability, I feel easyJet goes within the ‘to watch’ pile for me. There’s no compelling purpose for me to purchase proper now so I feel I’ll be investing funds in additional defensive sectors like prescription drugs for the second.