The easyJet (LSE: EZJ) share price has soared 20% during the last month, however as we speak’s (22 Might) half-year outcomes have taken a few of the wind out of its wings.

After such a pointy climb, this morning’s slight dip of round 1.5% isn’t stunning. During the last 12 months, the shares are up 21%, nevertheless it’s been a bumpy journey.

That’s usually the case within the airline sector, which stays uncovered to every thing from international battle to climate occasions and political turmoil.

Nonetheless, I’ve lengthy thought easyJet regarded like a doubtlessly sturdy restoration play. For individuals who purchased in early, the current rally will really feel like validation. The large query is whether or not there’s extra gas within the tank.

Earnings potential

Right now’s numbers cowl the six months to 31 March 2025. The seasonal winter loss earlier than tax got here in at £394m, which was according to expectations and solely barely worse than final 12 months’s £350m. The timing of Easter this 12 months distorted comparisons, the adjusted determine is claimed to be £50m higher 12 months on 12 months. 

Encouragingly, its easyJet Holidays operation continues to fly. It posted a £44m revenue, up £13m on final 12 months.

The corporate expects to ship full-year income of £703m. Bookings are wholesome, with 80% of seats bought for Q3 and 42% for Q4m. Demand seems sturdy going into the busy summer time months. 

Capability grew 12% within the first half, whereas crew productiveness and plane utilization improved. Working prices fell, with gas value per obtainable seat kilometre (CASK) down 8%.

The market might have been underwhelmed by as we speak’s affirmation that winter losses are nonetheless substantial, however I can see indicators of underlying progress.

The shares nonetheless look respectable worth, with a trailing price-to-earnings ratio of simply 9.2. That’s tempting for a corporation anticipating £1bn in annual revenue within the medium time period.

Dangers on the radar

That mentioned, the dangers aren’t arduous to identify. Airways are acutely delicate to financial cycles, and as a price range service, easyJet struggles when passengers really feel poorer. 

Inflation stays sticky, as we found yesterday, and that hits each shopper sentiment and working prices.

Right now’s share price response suggests some profit-taking and warning round the remainder of the reserving season. With an enormous a part of the summer time but to be bought, easyJet nonetheless has work to do.

Nonetheless price watching

Even so, I feel there’s quite a bit to love. I’m not alone. The 17 analysts providing one-year share price targets see a median of 684p. From as we speak’s 557p, that will be a achieve of greater than 23%. Add the two.2% trailing yield, and that’s a possible 25% whole return. Forecasts are simply guesswork, in fact.

Of the 18 analysts giving a inventory ranking, 11 say Sturdy Purchase and one other two say Purchase. Not a single one says Promote.

Traders contemplating this inventory may wish to maintain off somewhat to see if the price settles after such a robust run. However I nonetheless suppose easyJet is price a search for long-term buyers who need publicity to a growth-focused sector, so long as they’re ready for turbulence en route.