EasyJet Share Price Forecast 2022: EZJ Technical Analysis

EasyJet is a budget airline known for operating several routes that connect popular holiday destinations globally. As its business operations grew, the easyJet share price had been on the ascendancy between 2012 and 2015. The share price entered into somewhat of a stall between 2016 and 2019, and looked to be on the path to recovery before the COVID-19 pandemic hit. 

The shutdown of global aviation in the early months of the pandemic led to a monumental collapse in the easyJet share price, as it fell from a high of 1321p on 10 February 2020 to as low as 438p on 23 March 2020. Since then, the stock has had to endure a roller coaster ride as it tries to navigate between pandemic-related issues and a boardroom crisis that pre-dated the pandemic. The easyJet share price forecast for 2022 indicates that COVID-19-related issues will dictate price action, the company’s ability to return to pre-pandemic profit levels, and a lesser degree, geopolitical events.

COVID-19 and the easyJet Share Price 

To contain the spread of the pandemic, governments across the world had to close their borders to visitors and holiday travellers. In many cases, this also involved shutting off all incoming passenger traffic. The situation brought a total shutdown of global aviation, cutting off cash flow to airlines and forcing many to either furlough workers or lay them off entirely.

The easyJet share price bled out as investors dumped airline stocks in numbers. As travel began to pick up following the gradual reopening of borders, EasyJet’s share price began a slow recovery, hitting a pandemic high of 880.6 in May 2021. However, the discovery of the Omicron variant of COVID-19 in November 2021 led to some selling panic, driving prices back down to $472. However, the selloff was not as steep as March 2020 as data showed that the Omicron variant only caused milder illness.

Boardroom Crisis

A boardroom battle between airline founder and Chairman Stelios Haji-Ioannou and the board of directors over acquiring new aircraft peaked in May 2020. Stelios Haji-Ioannou’s family owns a third of the company’s stock. With the airline’s planes all grounded, the board decided to go ahead with a planned purchase of 107 Airbus planes for $5.6billion. Haji-Ioannou feared the purchase would send easyJet into bankruptcy. However, the board felt a need to replace some of its ageing planes and wanted to push the deal ahead. In a bid that eventually failed, Stelios Haji-Ioannou tried to force a vote to remove the CEO and other board members.

At the time, easyJet operated 141 aircraft, owning only 41% of this number. 2020 was a challenging year for the airline as it was forced to fly at 20% capacity for the rest of 2020 when the borders were gradually reopened. However, the airline has survived and has ridden out the worst of the pandemic years. It is slowly adding new routes to its schedule to capitalize on the pent-up demand for holiday travel in 2022.

EasyJet Stock Forecast for 2022

The WHO recently announced that new COVID-19 infections and hospitalizations were declining globally. As the impact of vaccinations and reduced spread of the less virulent Omicron variant are felt, global travel looks poised to recover well ahead of the 2023 projections. This could not have come at a better time.

Furthermore, the Daily Mail has reported that the top English side Chelsea FC may have to patronize the airline’s services after the UK government sanctioned its owner, Roman Abramovich. The sanctions mean the club has to scrap its private jet travels and opt for flight options that fall within the £20,000 spending limits for travel. This situation could provide solid tailwinds for the easyJet share price.

Institutional Analysis/Price Targets for easyJet. Source: Marketbeat.com

Fourteen analysts have issued varying recommendations for the stock. Two analysts have a SELL rating for EasyJet. Four have a HOLD rating, and eight have BUY ratings. The 12-month consensus price target for the easyJet share price is 734.50. This gives a potential upside of roughly 37% from its current price.

Technical Outlook: EasyJet Share Price

Tuesday’s 5.33% uptick in the easyJet share price has cleared the 508.8 resistance and looks set to challenge the resistance at 548.8. If the bulls uncap this barrier, 573.6 and 607.8 become the new targets to the north. Realistically, the bull trend will return when 739.4 has been surpassed, taking the stock above its 6-month highs.

On the other hand, rejection at 548.8 allows a pullback that retests 508.8. If the bulls fail to defend this support level, 472.0 becomes a new target. When the price dips below the 7 March 2022 low at 417.4, does 395.4 become a realistic target to the south? Below this level, the 19 March 2020 low at 348.8 forms a new pivot if the price declines further.

EasyJet: Daily Chart

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